Thanks for reporting this. We are actually aware of this issue. It is caused by the fact that MOSS 2007 does not use a XHTML compliant doctype by default. Our controls are designed to run primarily in a compliant environment, which is why there are some problems in the default MOSS scenario. In this case, we did some research and managed to find a workaround for the problem. We plan to release an updated RadEditor for MOSS build at the end of next week (together with the RadControls for ASP.NET AJAX service pack release).
If you do not wish to wait until then, you can try adding a doctype to your MOSS master page. For example:
<!DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.1//EN" "http://www.w3.org/TR/xhtml11/DTD/xhtml11.dtd
We apologize for the inconvenience.
the Telerik team