In the lite version of RadEditor for MOSS StripAbsoluteAnchorPaths
are the properties, which configure the URL behavior of the control. Could you confirm that while toggling between Design and Html mode of RadEditor the relative links remain the same. If this is the case unfortunately, this seems to be yet another problem, caused by the MOSS content filter. When you submit the page, MOSS will validate it and automatically make changes if the content is not valid. You can verify this by trying to enter the same content with the original SharePoint rich text editor.
We have not been able to find a workaround for this behavior yet.
All the best,
the Telerik team
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