I would like to inform you that we do not support Sitecore products and I am unable to provide a firm answer how Sitecore's configuration could affect our controls. Also you should be aware that the integration of our controls with third-party CMS environment is not supported and it you should try getting proper assistance in the corresponding CMS's forum.
About the certain problem with the indentation, I can assure you that the Telerik editor is placing a proper element with the proper stylization. Putting a blockquote
tag is a faulty behavior and I can only assume how our control could behave so. You can test the RadEditor by following this example
If you want to get updates on new releases, tips and tricks and sneak peeks at our product labs directly from the developers working on the UI for ASP.NET AJAX, subscribe to the blog feed