Real-time preview of node/form in Drupal 7
I have started development of a module - Live preview which might be more along the lines of what you're after.

This module provides a more comprehensive, genuine and interactive version of the built-in node preview feature.
The live preview feature requires JavaScript; if JavaScript is disabled it will not apply its triggers, effectively retaining the built-in preview.

It hasn't yet reached a stable release, but it's worth checking out (-dev version should work just fine).