Hello jake1981!
I will try to make something clear here. You said
It still should support bbcode instead of html so it would obey rules set in settings...
I didn't investigate further but I assume that your MOD does not still use bbcode instead of html and it propably then won't support these rules then
The MOD version 4.1 and 4.2 already supported BBCode. When user click Post/Preview button, HotEditor will output BBCode. You can test HotEditor stand alone version here so you can see how fast and accurate Hoteditor converts from WYSIWYG HTML to forum BBCode
http://www.ecardmax.com/hoteditor/phpdemo.php [nofollow] (you can try command "Switch On/Off WYSIWYG Mode" to convert HTML to BBCode and vice versa)
Also I guess smiley set rules aren't also supported.
Come and visit SMF Hoteditor demo again
http://www.ecardmax.com/smf_111/ [nofollow] - when you go to post new message, you will see original smiley icons on top of Hoteditor. Click smiley icon will insert it to Hoteditor.
Also you should make it focus the cursor to field when buttons are being clicked, it's really annoying to set bold text on and then click text field again before writing..
I think that's wrong to do it your way because sometime ppl need to select Bold, then Italic, then set Font Face. You can't just un-select text after user click Bold button (this is really annoying).
And someone was asking if this MOD will be compatible with in-far-future-arriving SMF 2.x.. I think this MOD is not needed with SMF 2.x as it already has a WYSIWYG editor (yeah really, check your settings to enable it), although there's a nice feature on your MOD that SMF 2.x does not YET hold, in your MOD there's a button where user can easily turn wysiwyg editor on/off when with smf 2.x you need to go to settings to change it's state(or maybe I just suck with this as I can't find anything similar from one that ships with smf 2.0)
I've seen SMF 2 WYSIWYG Editor. It now has a button

to let you switch from BBcode to WYSIWYG. Please don't take it a wrong way, SMF WYSIWYG Editor still has some major bugs when you switch from BBcode to WYSIWYG and vice versa. It doesn't work right in FireFox. There are a lot of work to do with current SMF WYSIWYG Editor, properly they are working on it and maybe this is a reason to slow down the day to release final SMF 2.0.
By the way, since HotEditor can output BBCode, it can be used with any forum software.
Anyway, you have done some really nice work with your MOD, even though that I commented the way I did about it.. Keep up the good work buddy..
Thanks a lot.
Jim