It appears to be OK for me in my test. Most likely for you the issue is with text encoding. Probably an encoding mismatch between the main page and the popup.
Can you send me your web.config, the page with tinyMCE on it and the popup.aspx (its probably in our Keyoti common folder in your app)? You can attach here or mail to me via support @ keyoti.com
Jim
-your feedback is helpful to other users, thank you!