After two years, the editor is no better. Maybe it's worse. You basically can't get decent HTML out of it. OK, what you get is actually well-formed from an XML standpoint, but it's semantically bad.
Line endings generate <br/>. Double line endings produce double <br/>. To actually get real paragraphs, i.e. <p>, your only choice seems to be to edit the HTML directly. Why can't two hard returns generate a <p>? It seems like a no-brainer. And the "Convert line breaks" option seems to make no difference whether it's "Yes" or "No"; I have it set to "No" and I still get line breaks inserted (but this only seems to be in the preview).
Plus, I've found that in Firefox, the easyGestures extension interacts disastrously with it: If you pop up the pie menu in the compose area, about a hundred lines of invisible crap HTML gets inserted.
So I've had it. From now on, I am writing everything in restructured text, converting it to HTML, and pasting that into the HTML editor. It sucks much, much less. I get some extra <span> and classes, but they don't hurt anything.