Try the ckEditor or the telerik version of it
http://ckeditor.com/whatsnew-asp.net[
^]
There all hard to pick up at first, and require extensive knowledge of Java Script to customize, but they work pretty well.
Tha't funny, I just wrote several programs that do what you want to do, but the code is quite large, and can't be posted.
Try the collaboration and testing forum, post something there