FCKEditor (link) is a powerful, open source HTML editor that is easily incorporated into nearly any site. It allows for customization of the interface, as well as options available to the user.
I recently found the need to customize the styles / CSS that users are able to select using the Editor. Often, users have many styles and fonts they put in a page and before you know it there are 1,000,000 sites with flying toasters and dramatic chipmunks on them again. Consistency and structure are the keys to any well-designed site. Allowing the user to only apply a pre-approved style / font to their content greatly reduces the risk of comic sans and animated gifs.
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