| | Teresa:
Glad to see you got it working. For an alternative handling, here's some more info.
In my case (MS-XP/IE browser),
I must skip 2 lines (ie, 'spaces'), THEN click on ~Quote~, else I run into the same exact prob as you. (Took me a while to find my 'workaround.')
When I do that, the grey 'quote' line occurs with the term "quote" in it, AND the cursor is now 1 space below (outside) the grey area. --- At this point pressing the space bar 1 time moves the cursor down (as if I hit "Enter") yet one more line, but, then backspacing brings it back up, and hitting the space bar a 2nd time moves the cursor across (for indenting or whatever).
Now, one can also place the cursor INSIDE the grey area to do the quoting (don't forget to eliminate the term "quote.") --- As well, one can place the cursor just below the original line (here, that's "Glad to see...", backspace, and the grey is moved up 1 space; I didn't do that here.
Finally, any quoting of quotings inside the grey box produces a new internal white box...with similar-to-above required handling.
LLAP J:D
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