TinyMCE is a great online WYSIWYG editor which is used for a lot of projects, for example this Wordpress blog application (the content backend).
I use TinyMCE for custom projects too. TinyMCE is free, generates good html code and the interface is easy to learn even for non-webmaster.
The project is open source and the developer Moxiecode earns money by selling useful plugins for image and link management.
Sometimes the Image manager too looks too big for some projects...
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