Assuming you have the ScrollFrame/ScrollChild hierarchy correct, shouldn't it look more like:
Code:
<EditBox name="$parentEdit" enableMouse="true" multiLine="true" autoFocus="false">
<Size x="264" y="281"/>
<Scripts>
<OnCursorChanged function="ScrollingEdit_OnCursorChanged"/>
<OnTextChanged>
ScrollingEdit_OnTextChanged(self, self:GetParent())
</OnTextChanged>
<OnUpdate>
ScrollingEdit_OnUpdate(self, elapsed, self:GetParent())
</OnUpdate>