[rich! @ etiviti]

1) Hitting the ‘Quote’ button populates the textarea with the text of the entire post being quoted, rather than just selected text. Is that the intended functionality?

2) Quoting a post that already quotes something (the much-feared QUOTE PYRAMID, or at least the beginning of one) doesn’t work (it populates the [cite] but not the [blockquote])… again wondering if that’s by design or not.

Yes both by design (pulls the entire post_content for the quote, blocks nested quoting) – well from the Ajaxed Quote plugin it was taken from – this is also common behavior on forum software too.

if you wanted highlight to quote type of feature – then all javascript for that type of behavior.