Steps to reproduce
paste the folowing html into the demo
<div id="Template" class="Home" unselectable="ON"></div>
<div style="width: 239px" class="HomeColumn1">
<h2>Message From the Board</h2>
<img border="0" alt="Board Members" src="http://cutesoft.net/I/Images/Home/BoardMembers.jpg" />
<p>This template should contain secondary and tertiary headings only.</p>
<p>DO NOT SELECT ALL AND DELETE. click inside this panel, drag over the text and paste or simply type directly into the document.</p>
<p><a class="FindOutMore" href="http://cutesoft.net/example/general.aspx#">Read the message in full</a> </p>
<p><a class="FindOutMore" href="http://cutesoft.net/example/general.aspx#">More about our key people</a> </p>
</div>
now single click selects the div, 2nd click allows editing inside the div, but if you try and insert a template now at your cursor point you can select the template but clicking insert gives the "accessing your clipboard" prompt and either allow or don't and you don't get the html from your selected template inserted.
indeed other functionality seems to go a little asqew when you are editing inside this fixed width div (html and preview buttons do nothing)
Thanks for your help.