Using Mozilla 3.5.3 or Safari 4.0.3 navigate to your Editor On Paste example page:

http://cutesoft.net/example/editor-onpaste.aspx

 

No mater the choice selected the option is useless. No matter what the selection made you can still ctrl^v and all the clipboard will be copied into the text editor with all formatting in place. When you select to view HTML you can see "<p class="MsoNormal">" which is styles from Microsoft Word (this was copied from the HTML when Disabled was selected).