I've used Telerik's r.a.d Editor Lite for Microsoft Content Management Server 2002 before and I can say that it was not a dissapointment! I had to tweak it a little to get fully compliant xhtml, but that was due to a by design issue in MCMS 2002.
Now Telerik delivered thier r.a.d editor for SharePoint 2007. Which has a lot of nice features, such as:
- Cross browser support
- Accessibility - Section 508 compliant
- Support for listings, list items and more
And what's more, it's free for all Microsoft Office SharePoint 2007 customers! I can't wait until I get a little time to play around with it! Here's a press release about it.