Yes it does only work with IE. The reason for this is that this tool is targeted at the end users of eZ publish which most often use IE. With IE we do get the best compatibility with word, for cut and past etc.
If you are not using IE you would just get the regular XML body of eZ publish. Different users of the same site can use different browsers and they can choose to turn on/the OE.
Yes, I acutally just saw the Online Editor. Looks great!
I suppose it somewhat makes my solution moot, but alas, mine is free ;) and really, it's a generic javascript class that I'm applying to eZ publish. It can just as easily be used for vBullitin or other environments.
I'm often in the same situation (on linux), so i need something similar for mozilla. Version 1.3 has the basic building blocks and is implemented in a BSD style licensed product called htmlarea.
see http://www.interactivetools.com/products/htmlarea/
But again, this is still xhtml <> xml <> xhtml and may suffer from limitations on the textarea size limitations.
So to support more xml variants in the future, xopus and bitflux are the ones to take a look at.