Using the editor at http://cutesoft.net/example/JavaScript-API.aspx (in IE6 or Firefox), I encounter this problem when I do the following:

1. switch to HTML view
2. delete all the text in the editor and paste in the following:
<object width="425" height="350"><param name="movie" value="http://www.youtube.com/v/bJpnri3NQdo"></param><param

name="wmode" value="transparent"></param><embed src="http://www.youtube.com/v/bJpnri3NQdo"

type="application/x-shockwave-flash" wmode="transparent" width="425" height="350"></embed></object>

3. Click the get HTML button -- you see the text you just pasted.

4. Click the set HTML button.  It seems to switch to Normal view (I see the result of the HTML, not the code itself) although the HTML tab is still hilighted.

5. We want to see the actual HTML but clicking HTML tab doesn't do it (presumably because it is currently highlighted).  Click the Normal tab, then the HTML tab to view the code.  The textbox is empty.