Shawna that is indicating that your Javascript is not working in Firefox. In fact all your issues including the deletions is indicating that.. are you on a Mac? What type of system are you running on? I am using FireFox 3.6 as well and have no issues..
Use Markup means use bbcode markup when showing the post ie [ b][ /b]
Use Html means to use html when showing the post ie
And the smiles should now appear correctly.. it was a setting that had to be adjusted..