your on the right track. load the data into a textarea. remember, text area's dont have a value element.
<textarea name="data"><?php echo $data; ?></textarea>
you'll also need to pass an id, or something to varifiy which record you want to update.
<input type="hidden" name="id" value="<?echo $id; ?>">
then submit this to a script which will run an UPDATE statment. its almost exectly like inserting new data, but instead your query might look something like.
UPDATE tbl SET fld = '$_POST['data']' WHERE id = $id;
hope this is enough of a kick in the right direction.