Adam, no offense but you should stop showing that silly example.  its no example at all.

Clicking both radio buttons, then viewing source shows the source is still /uploads/xxxxxx.gif

What we need is a REAL answer

Heres my problem.

I am calling the control from an EditHTML.aspx file in /admin/CMS to edit a file that is lets say /index.html

Now, the image links in index.html are referenced with relative paths aka "images/home.gif"

When editing the file, the images do not show up in the edit window.

How do I fix this?