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Just had a quick glance at the demo. The first thing that would put me off using it in a CMS situation is that enter only line breaks and doesn't create a set of paragraph tags.
For me relying on CSS markup to make it all look pretty this would seriously mess up the look of my site when edited by a client. Even after formatting something as a header I would assume it would make <p> tags for following content and line break within that but it only breaks more after the h tags.
I understand it's early days and needs more work but I'd advise trying to offer something other WYSIWYGs don't to make it more appealing over a more well established editor.
-Leonard
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