The compiler version installed with the VS plugin doesn't have this option, but the version for node.js has. However I can't make this mode work on Windows. It creates empty files and doesn't compile anything. Is it a known bug? Can this be helped? I don't want to use heavy-weight VS, create a VS project and so on.
Update: I filed a bug.
-w is not supported except on node. If you even run help command you will not get -w unless you are using node. Getting it to work on non-node runtimes would be a good suggession to make on codeplex http://typescript.codeplex.com/workitem/list/basic