Thanks for the comments people, I know this idea wont set the world on fire, as Joel mentioned, it fits a niche (in a the true sense of the word).
The independent file manager with upload is almost done which I will add in shortly. But for a question a little off topic. Looks like the only way for the editor to produce valid code is to use the doctype 'XHTML 1.0 Transitional', there is some weirdness (align attr. on images) with the wysiwyg editor with floating images that 'XHTML 1.0 Strict' doesn't like. I know the Xinha editor produces better code, but it doesn't work in Opera and Safari. Does anyone know of an OS editor that will work in all browsers yet produce valid output ? Or considering the target audience for the end user do you reckon I should sacrifice Safari and Opera users to produce valid code ? Cheers