Well that's impressive stuff! Especially as it doesn't use designMode or the like.

I too have had 'fun' with text editing in browsers. And I need to revisit it at some point. :-(

Here's an experiment of mine: http://www.fluffy.co.uk/stediting/ -- very proof of concept, only left+right keyboard navigation works so far. However, it does show that proportionally spaced text is possible with this kind of technique. Using monospaced fonts, like Ymacs does, is cheating.

I was going to do make something which would sort this out once and for all: http://code.google.com/p/editable-framework-js/ but as is the way with many an open source project, it didn't get much further than thinking about the design.

I found this linked from the Ymacs site http://marijn.haverbeke.nl/codemirror/story.html which is a nice explanation about why using designMode is a nightmare.