While playing around with the different options for handling word
wrapping in org-mode, I decided to instead hack an extension that
improves visual-line-mode's word wrapping when used in conjunction
with org-mode.  In particular, the mrd-org-smartwrap minor mode
automatically sets the `wrap-prefix' property on all section headlines
and plain list entries so that visual-line-mode's native word wrapping
looks identical to what careful and continual usage of TAB and M-q
should produce, without any of the quirks of using auto-fill-mode or
refill-mode.

Just thought I'd share in case anyone else found it useful / interesting.

Caveats: It's incompatible with org-indent-mode, doesn't do anything
to support org-adapt-indentation, and results in tables being word
wrapped.  I've also noticed linum-mode causes it to go crazy if the
top visible line is the continuation of a soft wrapped line.