First of all, I would discourage continuing the same topic in two different forums.
Next, Do remember that no matter what technology you are using,
It will be difficult to support all features laid down by a traditional desktop application.
You have several alternatives to design your application including jquery, Ext JS, applets
, GWT, etc.
I would suggest you look at the pros and cons of each of the technologies before making up your mind to go for one of them.
Honestly, I am a bit biased towards GWT and here are some links to applications similar to yours:
>> comes very close to your requirement, but the application is down currently...
So, make up your mind on the technology and then let us know, we can guide you along.
To be frank, I too, at one point of time thought of a WYSIWYG editor for HTML page online, but in a different context..
My kind of target client would be a person who has no idea about HTML but wants to make a website, so I wanted to make a 'Layout' based HTML editor.
Hope this helps you ....