After poking around, using almost all your features, etc. here's my SETT feedback. I'll do the 'feedback sandwich' so as not to hurt your feelings.
I would use this for my blog if you would let me, not just because we've hung out and you're a good guy.
- Let me resize images in replies - as you can see from my reply to the 'lets make a books list' post, you can see that the two images I have are frickin huge. I was able to resize them down when I first put them on there (they were put there via url, not uploaded) but when I actually posted them, they blew back up to the original size.
- Let me delete my posts, or at least my comments- I tried to when the huge pictures showed up and I couldn't.
- Another little thing about putting in images, and a larger point about the community side of SETT - when I wrote the 'post' about 'communication extremes' I wanted to break up the length with pictures. It was inconvenient to have to scroll down to the bottom of everything to get to those buttons (could you just have them appear on the side once I decide I'm going to create a post, and then keep the menu of options floating in the middle of the page on the side so it would be easier to get at?). Also, once I scrolled down the page, I wanted to try to avoid having to move the picture from the bottom of the post up to where I want it to be inserted into the post. I put my cursor where I hoped it would end up being embedded and...it went in at the bottom of the post. The greater point here is that if you want the community side feature of SETT to matter, it has to not feel like a message board where people just post threads of random crap - you want them to think & actually create and contribute, ideally. You'd like for it all to be quality content and your voting things up and down feature helps with that. But if people are going to think of their posts as actual posts, then try to give the community entries that would be considered 'posts' an experience like they were writing an actual post on their own blog. Part of this experience includes keeping the formatting menu in view at all times, and I'm sure there's more to it - I'm not a UX pro - it just seems to be a key differentiating factor that's not captured in just 'make it easier for me to post pictures' kind of feedback. One good example of you doing this is the "posting your masterpiece" message while you're waiting for it to load.
- embedding youtube videos - I did this on my comment about the community side of SETT - put in a mobileX video and it bled off the side of the comment column
- Hyperlinks - I put a bunch of URLs into my post, instead of making them hyperlinks...again, this comes back to the "make me feel like i'm writing an actual blog post" experience....because hopefully I am and it will end up on your front page because it's so freaking quality and I get exposure and you get great content at your blog that you didn't have to write - you know...one of the main differentiating factors of SETT ;)
I would use this (meaning, I would switch from my current platform - posterous btw). Not sure you can give more of a compliment than that.
Also, I like that the bold, italics, & underline features can be activated through the standard keyboard shortcuts for them (ctrl + i, ctrl + b, etc.)