i'm seeing the same problems with firefox 2 and 3, safari and chrome. paste or even type text into the editor, then go back to the middle of a para and hit return. all the following html gets messed up. this is universal across both my own implementation of cuteeditor 6.4 asp.net version, and the demo version on cutesoft site.
the problem doesn't occur when using IE.
i've tried setting the para tag (editor.breakelement) to P and this doesn't help. it looks like the closing and opening tags for new para's get put in the wrong place, and other tags get stripped out. haven't examined it in detail yet.
serious issue, tho i'm at a loss to understand why no one else has spotted it yet. i downloaded the trial version 6.4 about two days ago - perhaps a recent update?