You are right, behaviour of beautify-html.js is weird; HTML Tidy still seems to be the preferable tool for this task in PSPad. (In fact I just wanted to have jsbeautifier.org in PSPad for javascript, the fact there were also CSS and HTML formatters in that repo was a bit surprise for me and I added them without excessive testing.)
-- <http://forum.pspad.com/read.php?2,62261,62360> PSPad freeware editor http://www.pspad.com
