Well your code looks like this:
<textarea id="tinyMCE"></textarea>
So what is happening here? You just add a textarea with the ID="tinyMCE" but no behaviour is added to the TextArea.
In jQuery I would expect at least the following:
<textarea class="tinyMCE"></textarea>
or event better:
$('<textarea></textarea>').tinyMCE().appendTo($('#textBody'));
EDIT:
You might try something like this...
$('<textarea id="UniqueId"></textarea>').tinyMCE().appendTo($('#textBody'));
tinyMCE.init({
mode : "exact",
elements : "UniqueId"
});
On the tinyMCE-Formus is already a diskussion going on...
http://tinymce.moxiecode.com/punbb/viewtopic.php?id=15477
.tinyMCEscript look like? The one that's running based on that selector? Also you should use a class here, IDs need to be unique.