This is tested on your own demo page on http://phphtmledit.com/EnableAll.php.
I used IETester with an IE6 tab to test it on IE6.
When I hit the return button it will not add any line breaks, if I click the <BR> button in the toolbar it just adds it.
This is with the default BreakElement="Div", if I put it on BreakElement="Br" we're fine again...
Small demo recorded and exported to SWF to show you what is wrong:
http://www.messwithyou.com/dump/cutebug.swf