Things should work fine using the full edit script which is what I have already tested.
I can not tell you how to make things display correctly in the inline editor.
You can try adding this line as noted in showframe.php to convert the html back to html from characters to html before the comment is updated in the database but thats the only comment I can make about the java inline editor. java and php do not work with each other.
The line in bold is what you can add before the query noted in showframe.php
Content visible to verified customers only.