Oh... I guess that would be the other way. I assumed that nobody said that since the way you posted way seems a bit more tedious than the first suggested way - especially since it only works if a text box is selected.
This is a bug in the current version of Safari 2.0.4 (419.3), as it doesn't seem to honor the plist entry WebContinuousSpellCheckingEnabled. This seems to have been fixed or applied in the WebKit nightlies, and has been for quite some time.
Using the latest version of WebKit, I don't need to enable it for each individual textbox or for each new instance/window of Safari.