Here's a live demo of the OpenLaszlo Rich Text Editor, which is part of the Laszlo Mail application. (If this were an academic paper, I'd have been thinking for weeks about the order of author names. In this case, I'll just let the team lead do the talking.) A specification of the user interface and api is available on the wiki.
The platform version of the editor supports a more stable subset of the formatting operations available in Laszlo Mail. Paragraph formatting in the flash runtime is challenging; character formatting is simpler.