I run into this same problem as WaterStreet said above.

Using FireFox, you can reproduce the problem at the CuteEditor for .NET demo page:
http://cutesoft.net/example/general.aspx

Just click in the text input area and hit Backspace. It won't delete any character.

Strangely, I can't reproduce this problem with the CuteEditor for ASP demo page:
http://cutesoft.net/asp/EnableAll.asp