Just a bug (or a feature? 0_o ), in Chrome at least it only lets me create two lines, after that it begins writing over the second line. Other than that it's pretty soothing lol.
Hmm, I'm not able to reproduce that. Did you happen to paste anything in? Currently the contenteditable div gets a little jumbled when you paste in anything that isn't plaintext.
Hmm. I just tried and was unable to reproduce it as well. Maybe I copy/pasted something in that it didn't like? Sorry for the false report, I'll mess around a bit and see if I can get it to work again.