Here is a simpler way, and it works for me:

Inside your cellForRowAtIndexPath .... function. The first time you create your cell:

UITableViewCell *cell = [tableView dequeueReusableCellWithIdentifier:CellIdentifier];
if (cell == nil) {
    cell = [[[UITableViewCell alloc] initWithStyle:UITableViewCellStyleDefault reuseIdentifier:CellIdentifier] autorelease];
	cell.textLabel.lineBreakMode = UILineBreakModeWordWrap;
	cell.textLabel.numberOfLines = 0;
	cell.textLabel.font = [UIFont fontWithName:@"Helvetica" size:17.0];
}

You'll notice that I set the number of lines for the label to 0. This lets it use as many lines as it needs.

The next part is to specify how large your UITableViewCell will be, so do that in your heightForRowAtIndexPath function:

- (CGFloat)tableView:(UITableView *)tableView heightForRowAtIndexPath:(NSIndexPath *)indexPath
{
NSString *cellText = @"Go get some text for your cell.";
UIFont *cellFont = [UIFont fontWithName:@"Helvetica" size:17.0];
CGSize constraintSize = CGSizeMake(280.0f, MAXFLOAT);
CGSize labelSize = [cellText sizeWithFont:cellFont constrainedToSize:constraintSize lineBreakMode:UILineBreakModeWordWrap];

return labelSize.height + 20;
}

I added 20 to my returned cell height because I like a little buffer around my text.

I don't think you can manipulate a base UITableViewCell's private UILabel to do this. You could add a new UILabel to the cell yourself and use numberOfLines with sizeToFit to size it appropriately. Something like:

UILabel* label = [[UILabel alloc] initWithFrame:cell.frame];
label.numberOfLines = <...an appriate number of lines...>
label.text = <...your text...>
[label sizeToFit];
[cell addSubview:label];
[label release];

Add your own UILabel as a subview of the cell.contentView view.