I have used WP live CSS Editor before and it is on a WP 3.2.1 site and it worked fine
I have just installed it on a second site and whilst it all activates the same it seems that in the edit window the CSS doesnt display properly.
It is showing the CSS in a window that is about 3/4 of a line high and the CSS code scrolls in that 1 line so you can't really read it or edit it.
On the previous site it displays a lot of lines of css and you can scroll down through it and edit the lines you want and it is all perfect.
I have even uninstalled WP from my site removed the DB entry for it and reinstalled everything from scratch but it is still showing the same problem
I have tried it in multiple browsers IE Chrome and firefox on multiple OS Windows 7 and Mac OS but it seems to be doing the same thing in all of them.
If I go to the other site where I used it before it is still working fine.
Both sites are hosted on GoDaddy