This still continues to be a problem with IE browsers. It's because if there is a carriage return after the image tag it causes a space below the image.
The problem with CuteEditor is that the output HTML is not the same as the HTML in the editor itself. For example you may see the following in the editor:
<td>
<p><img src="http://cutesoft.net/someimage.jpg" /></p>
</td>
but the output HTML happens to be:
<td>
<p>
<img src="http://cutesoft.net/someimage.jpg" />
</p>
</td>
That carriage return after the image tag causes the extra space in IE.
Is there any way to resolve this?