By clicking on the appropriate buttons on the editor, you can:
* Make text bold, italic, or underlined (http://www.livejournal.com/support/faqbrowse.bml?faqid=72)
* Change text size (http://www.livejournal.com/users/howto/24298.html)
* Change text color (http://www.livejournal.com/users/howto/24298.html)
* Link to other websites (http://www.livejournal.com/support/faqbrowse.bml?faqid=67)
* Add an image (http://www.livejournal.com/support/faqbrowse.bml?faqid=6)
* Link to another LiveJournal user (http://www.livejournal.com/support/faqbrowse.bml?faqid=75)
* Cut part of the text using the lj-cut tag (http://www.livejournal.com/support/faqbrowse.bml?faqid=75)
* Undo and redo any changes you make
seems misleading to me.
If you follow the FAQ links after the text, which the FAQ seems to imply you should do, it gives you instructions for doing those things in HTML. If you insert HTML into rich text, everything breaks, dogs and cats, living together, mass hysteria.
This should be fixed. *waves hand* make it so.