Have you replaced all the Cute Editor client files when upgrade?
This is a demo of the latest version:
Make sure you clean up your browser cache as well. If the editor is using the old style sheet in your browser cache, the editor will display strangely.
asp.net Chat http://cutesoft.net/ASP.NET+Chat/default.aspx
Web Messenger: http://cutesoft.net/Web-Messenger/default.aspx
asp.net wysiwyg editor: http://cutesoft.net/ASP.NET+WYSIWYG+Editor/default.aspx
asp wysiwyg html editor: http://cutesoft.net/ASP
asp.net Image Gallery: http://cutesoft.net/ASP.NET+Image+Gallery/default.aspx
Live Support: http://cutesoft.net/live-support/default.aspx