I had to tweaking to get the editor to work properly but there are still some issues.
the wpuf editor is associating with the add-post page and the new post which is causing some permission issues.
I have it set on Full Rich Text.
First I disabled the text and visual tabs by adding
'quicktags' => false to the wp_editor args in wpuf-add-posts.php. Now it only allows visual and it doesn't display the tags.
Second, I used wp-user role editor ,a very useful thing to have if you're using wpuf, to grant subscribers the capabilities to add, edit and delete their own posts if they have not been published.
I also added the capability to add media which causes the Add Media button to appear.
Here's where it gets weird.
subscribers can't upload images unless I grant permission to update pages and update published pages. It gives an error and the image can't even be uploaded. This tells me that when they try to upload an image wordpress thinks that they are trying to add a an image to the page and it doesn't allow it.
When I grant these capabilities, though, everything seems to work ok. There is another issue with images appearing at the bottom of the post but we fixed that through styling.