Hyperlinking an image using the html editor gives strange behaviour using different browsers.....
In Firefox (I'm using 1.0.7), try this.
insert an image, give it a useful alt text - eg "image"
then make sure the image is selected and use the hyperlink button to create a hyperlink for the image.
for the hyperlink title use some useful text like "URL" - then hit ok.
Instead of creating a hyperlink, in Firefox, the Image disapears, however the image alt text appears in place of the image as "text" (If that makes sense!)
In IE 6 you get a JS error like mentioned here:
In IE 7 (Beta 2) you don't get a JS error, but when you try to add a link to an image, the insert Link window doesn't do anything when you hit "OK" - it just sits there, and makes no changes to the underlying window (this is possibly just an IE 7 quirk, - might be improved in the next version....) - I'll upgrade to RC 1 to see If I can get any more debug info out! ( I will upgrade FF as well to see if that makes any difference.