This is on a fresh install of 3.3.2, no plugins.
In IE7 & 8, if I click upload/insert before adding anything to the editor I can see the cursor beneath the modal overlay flashing all the way to the top of the text area, I finish uploading my file, place my cursor in editor area, sits all the way at the top. Start typing cursor moves for each character, but nothing can be seen, and nothing appears in the html tab either.
Workarounds so far:
After typing the first few invisible characters, click "remove formatting" and everything is good from here on out. One thing I've noticed when doing this is that the cursor drops around 20px, no longer riding the top of the editor area.
Enter text into editor before clicking upload/insert.
These workarounds are fine for me, but not for the users of this site. Any thoughts on a possible solution, besides getting the users to use a better browser?