That's probably because I severely restricted the editor's capabilities in an attempt to get all these layout issues under control. The editor's settings were way too liberal before (remember those floating image problems?).

I'm toying with the idea of removing the image button from the editor entirely and handling images automatically. Basically, if a user pastes a link to an image into the editor, it would be displayed in the post as a thumbnail (the browser would download the full image and I'd simply resize it with CSS) that would open the full size version when clicked. This would solve the large image formatting problem as well as prevent posts with multiple large images from taking up huge amounts of space.