Works better, but it has its share of weirdness. Just by clicking around on a "lorem ipsum" text it seems to work okay in Firefox (beta) and Camino (i.e. two Gecko versions), not at all in Chrome dev (clicking on italic/bold/h1 won't change anything) and if I select a line in Safari to make it a headline, it also applies the transformation to the following paragraph. If I then click "h1" again, everything is back to normal. A third click then works as intended, i.e. only the selected line is turned into a headline. From then on, this line works normal, but the whole game repeats itself if I do it with another line.
Advanced example works without bugs for me; my test has following HTML output ("So this is <b>the</b> thing <i>then</i>?<br><br><h1><span class="wysiwyg-color-red">Does it always work?</span></h1><h2>If it does then, great!</h2>Or, y'know, not bad.<br><br><ul><li>Yes</li><li>No</li><li>Maybe</li><li>So!</li></ul><h1>Yay it worked!!</h1>").
