I've found trouble with using the send to editor link in WP 2.0.2 in IE exclusively (FF works fine) and commenting out this line in the sendToEditor function of inline-uploading.php seems to solve the problem
h = h.replace(new RegExp(' (class|title|width|height|id|onclick|onmousedown)=([^\'"][^ ]*)( |/|>)', 'g'), ' $1="$2"$3'); // Enclose attribs in quotes
is there something wrong with this regular expression rule? It has been moving the quotation marks around on me irregularly (but only in IE).
I also find that the drop size constraints rule won't work either in IE. And it doesn't matter whether the rich editor is on or not.