Adam:
Yes, I still had problems with Firefox with your empty editor example.
After additional testing, I found that I must insert a few characters into the text box and then put my cursor at the end of the characters before the insert images will work. If I insert an image into the text box before I insert a character, the image appears but when I switch to HTML view there is no code. When I switch back to normal view the image disappears.
The above problem also occurs when I try to insert flash, media or even a table. But adding a few characters before the insert makes it work.
Interestingly, inserting an image from the drop down image selector works fine.
Thoughts?