diff --git a/Makefile b/Makefile
index f5c7f7ba..ca89896b 100644
--- a/Makefile
+++ b/Makefile
@@ -40,7 +40,6 @@ JS_FILES = src/wysihtml5.js \
   src/quirks/clean_pasted_html.js \
   src/quirks/ensure_proper_clearing.js \
   src/quirks/get_correct_inner_html.js \
-  src/quirks/insert_line_break_on_return.js \
   src/quirks/redraw.js \
   src/selection/selection.js \
   src/selection/html_applier.js \
diff --git a/examples/advanced.html b/examples/advanced.html
index d4abb767..2ecb2656 100644
--- a/examples/advanced.html
+++ b/examples/advanced.html
@@ -38,7 +38,7 @@
   
   #toolbar,
   textarea {
-    width: 900px;
+    width: 920px;
     padding: 5px;
     -webkit-box-sizing: border-box;
     -ms-box-sizing: border-box;
@@ -91,6 +91,7 @@ <h1>wysihtml5 - Advanced Editor Example</h1>
     <a data-wysihtml5-command="insertImage">insert image</a> |
     <a data-wysihtml5-command="formatBlock" data-wysihtml5-command-value="h1">h1</a> |
     <a data-wysihtml5-command="formatBlock" data-wysihtml5-command-value="h2">h2</a> |
+    <a data-wysihtml5-command="formatBlock" data-wysihtml5-command-value="p">p</a> |
     <a data-wysihtml5-command="insertUnorderedList">insertUnorderedList</a> |
     <a data-wysihtml5-command="insertOrderedList">insertOrderedList</a> |
     <a data-wysihtml5-command="foreColor" data-wysihtml5-command-value="red">red</a> |
@@ -139,9 +140,10 @@ <h2>Events:</h2>
 <script src="../dist/wysihtml5-0.3.0.js"></script>
 <script>
   var editor = new wysihtml5.Editor("textarea", {
-    toolbar:      "toolbar",
-    stylesheets:  "css/stylesheet.css",
-    parserRules:  wysihtml5ParserRules
+    toolbar:        "toolbar",
+    stylesheets:    "css/stylesheet.css",
+    parserRules:    wysihtml5ParserRules,
+    useLineBreaks:  false
   });
   
   var log = document.getElementById("log");
diff --git a/examples/simple.html b/examples/simple.html
index 71e68fc4..1265e6ab 100644
--- a/examples/simple.html
+++ b/examples/simple.html
@@ -90,8 +90,9 @@ <h2>Events:</h2>
 <script src="../dist/wysihtml5-0.3.0.js"></script>
 <script>
   var editor = new wysihtml5.Editor("textarea", {
-    toolbar:      "toolbar",
-    parserRules:  wysihtml5ParserRules
+    toolbar:        "toolbar",
+    parserRules:    wysihtml5ParserRules,
+    useLineBreaks:  false
   });
   
   var log = document.getElementById("log");
diff --git a/src/browser.js b/src/browser.js
index 2dffda5d..fe829534 100644
--- a/src/browser.js
+++ b/src/browser.js
@@ -88,7 +88,7 @@ wysihtml5.browser = (function() {
      * Firefox sometimes shows a huge caret in the beginning after focusing
      */
     displaysCaretInEmptyContentEditableCorrectly: function() {
-      return !isGecko;
+      return isIE;
     },
 
     /**
@@ -167,8 +167,8 @@ wysihtml5.browser = (function() {
          // When inserting unordered or ordered lists in Firefox, Chrome or Safari, the current selection or line gets
          // converted into a list (<ul><li>...</li></ul>, <ol><li>...</li></ol>)
          // IE and Opera act a bit different here as they convert the entire content of the current block element into a list
-        "insertUnorderedList":  isIE || isOpera || isWebKit,
-        "insertOrderedList":    isIE || isOpera || isWebKit
+        "insertUnorderedList":  isIE || isWebKit,
+        "insertOrderedList":    isIE || isWebKit
       };
       
       // Firefox throws errors for queryCommandSupported, so we have to build up our own object of supported commands
@@ -240,14 +240,6 @@ wysihtml5.browser = (function() {
       return isGecko || isIE || isOpera;
     },
 
-    /**
-     * When the caret is in an empty list (<ul><li>|</li></ul>) which is the first child in an contentEditable container
-     * pressing backspace doesn't remove the entire list as done in other browsers
-     */
-    clearsListsInContentEditableCorrectly: function() {
-      return isGecko || isIE || isWebKit;
-    },
-
     /**
      * All browsers except Safari and Chrome automatically scroll the range/caret position into view
      */
@@ -335,6 +327,16 @@ wysihtml5.browser = (function() {
     
     hasUndoInContextMenu: function() {
       return isGecko || isChrome || isOpera;
+    },
+    
+    /**
+     * Opera sometimes doesn't insert the node at the right position when range.insertNode(someNode)
+     * is used (regardless if rangy or native)
+     * This especially happens when the caret is positioned right after a <br> because then
+     * insertNode() will insert the node right before the <br>
+     */
+    hasInsertNodeIssue: function() {
+      return isOpera;
     }
   };
 })();
\ No newline at end of file
diff --git a/src/commands/formatBlock.js b/src/commands/formatBlock.js
index 3cdb595f..e662b82a 100644
--- a/src/commands/formatBlock.js
+++ b/src/commands/formatBlock.js
@@ -1,10 +1,9 @@
 (function(wysihtml5) {
   var dom                     = wysihtml5.dom,
-      DEFAULT_NODE_NAME       = "DIV",
       // Following elements are grouped
       // when the caret is within a H1 and the H4 is invoked, the H1 should turn into H4
       // instead of creating a H4 within a H1 which would result in semantically invalid html
-      BLOCK_ELEMENTS_GROUP    = ["H1", "H2", "H3", "H4", "H5", "H6", "P", "BLOCKQUOTE", DEFAULT_NODE_NAME];
+      BLOCK_ELEMENTS_GROUP    = ["H1", "H2", "H3", "H4", "H5", "H6", "P", "BLOCKQUOTE", "DIV"];
   
   /**
    * Remove similiar classes (based on classRegExp)
@@ -141,7 +140,7 @@
     composer.selection.surround(element);
     _removeLineBreakBeforeAndAfter(element);
     _removeLastChildIfLineBreak(element);
-    composer.selection.selectNode(element);
+    composer.selection.selectNode(element, wysihtml5.browser.displaysCaretInEmptyContentEditableCorrectly());
   }
 
   function _hasClasses(element) {
@@ -150,26 +149,28 @@
   
   wysihtml5.commands.formatBlock = {
     exec: function(composer, command, nodeName, className, classRegExp) {
-      var doc          = composer.doc,
-          blockElement = this.state(composer, command, nodeName, className, classRegExp),
+      var doc             = composer.doc,
+          blockElement    = this.state(composer, command, nodeName, className, classRegExp),
+          useLineBreaks   = composer.config.useLineBreaks,
+          defaultNodeName = useLineBreaks ? "DIV" : "P",
           selectedNode;
 
       nodeName = typeof(nodeName) === "string" ? nodeName.toUpperCase() : nodeName;
-
+      
       if (blockElement) {
         composer.selection.executeAndRestoreSimple(function() {
           if (classRegExp) {
             _removeClass(blockElement, classRegExp);
           }
           var hasClasses = _hasClasses(blockElement);
-          if (!hasClasses && blockElement.nodeName === (nodeName || DEFAULT_NODE_NAME)) {
+          if (!hasClasses && (useLineBreaks || nodeName === "P")) {
             // Insert a line break afterwards and beforewards when there are siblings
             // that are not of type line break or block element
             _addLineBreakBeforeAndAfter(blockElement);
             dom.replaceWithChildNodes(blockElement);
-          } else if (hasClasses) {
-            // Make sure that styling is kept by renaming the element to <div> and copying over the class name
-            dom.renameElement(blockElement, DEFAULT_NODE_NAME);
+          } else {
+            // Make sure that styling is kept by renaming the element to a <div> or <p> and copying over the class name
+            dom.renameElement(blockElement, nodeName === "P" ? "DIV" : defaultNodeName);
           }
         });
         return;
@@ -183,7 +184,7 @@
         });
 
         if (blockElement) {
-          composer.selection.executeAndRestoreSimple(function() {
+          composer.selection.executeAndRestore(function() {
             // Rename current block element to new block element and add class
             if (nodeName) {
               blockElement = dom.renameElement(blockElement, nodeName);
@@ -197,11 +198,11 @@
       }
 
       if (composer.commands.support(command)) {
-        _execCommand(doc, command, nodeName || DEFAULT_NODE_NAME, className);
+        _execCommand(doc, command, nodeName || defaultNodeName, className);
         return;
       }
 
-      blockElement = doc.createElement(nodeName || DEFAULT_NODE_NAME);
+      blockElement = doc.createElement(nodeName || defaultNodeName);
       if (className) {
         blockElement.className = className;
       }
diff --git a/src/commands/insertOrderedList.js b/src/commands/insertOrderedList.js
index 21119890..abddcd8f 100644
--- a/src/commands/insertOrderedList.js
+++ b/src/commands/insertOrderedList.js
@@ -8,7 +8,7 @@ wysihtml5.commands.insertOrderedList = {
         isEmpty,
         tempElement;
     
-    if (composer.commands.support(command)) {
+    if (!list && !otherList && composer.commands.support(command)) {
       doc.execCommand(command, false, null);
       return;
     }
@@ -18,15 +18,15 @@ wysihtml5.commands.insertOrderedList = {
       // <ol><li>foo</li><li>bar</li></ol>
       // becomes:
       // foo<br>bar<br>
-      composer.selection.executeAndRestoreSimple(function() {
-        wysihtml5.dom.resolveList(list);
+      composer.selection.executeAndRestore(function() {
+        wysihtml5.dom.resolveList(list, composer.config.useLineBreaks);
       });
     } else if (otherList) {
       // Turn an unordered list into an ordered list
       // <ul><li>foo</li><li>bar</li></ul>
       // becomes:
       // <ol><li>foo</li><li>bar</li></ol>
-      composer.selection.executeAndRestoreSimple(function() {
+      composer.selection.executeAndRestore(function() {
         wysihtml5.dom.renameElement(otherList, "ol");
       });
     } else {
@@ -34,11 +34,11 @@ wysihtml5.commands.insertOrderedList = {
       composer.commands.exec("formatBlock", "div", tempClassName);
       tempElement = doc.querySelector("." + tempClassName);
       isEmpty = tempElement.innerHTML === "" || tempElement.innerHTML === wysihtml5.INVISIBLE_SPACE || tempElement.innerHTML === "<br>";
-      composer.selection.executeAndRestoreSimple(function() {
+      composer.selection.executeAndRestore(function() {
         list = wysihtml5.dom.convertToList(tempElement, "ol");
       });
       if (isEmpty) {
-        composer.selection.selectNode(list.querySelector("li"));
+        composer.selection.selectNode(list.querySelector("li"), true);
       }
     }
   },
diff --git a/src/commands/insertUnorderedList.js b/src/commands/insertUnorderedList.js
index f7ed66ea..b0640ea9 100644
--- a/src/commands/insertUnorderedList.js
+++ b/src/commands/insertUnorderedList.js
@@ -8,7 +8,7 @@ wysihtml5.commands.insertUnorderedList = {
         isEmpty,
         tempElement;
     
-    if (composer.commands.support(command)) {
+    if (!list && !otherList && composer.commands.support(command)) {
       doc.execCommand(command, false, null);
       return;
     }
@@ -18,15 +18,15 @@ wysihtml5.commands.insertUnorderedList = {
       // <ul><li>foo</li><li>bar</li></ul>
       // becomes:
       // foo<br>bar<br>
-      composer.selection.executeAndRestoreSimple(function() {
-        wysihtml5.dom.resolveList(list);
+      composer.selection.executeAndRestore(function() {
+        wysihtml5.dom.resolveList(list, composer.config.useLineBreaks);
       });
     } else if (otherList) {
       // Turn an ordered list into an unordered list
       // <ol><li>foo</li><li>bar</li></ol>
       // becomes:
       // <ul><li>foo</li><li>bar</li></ul>
-      composer.selection.executeAndRestoreSimple(function() {
+      composer.selection.executeAndRestore(function() {
         wysihtml5.dom.renameElement(otherList, "ul");
       });
     } else {
@@ -34,11 +34,11 @@ wysihtml5.commands.insertUnorderedList = {
       composer.commands.exec("formatBlock", "div", tempClassName);
       tempElement = doc.querySelector("." + tempClassName);
       isEmpty = tempElement.innerHTML === "" || tempElement.innerHTML === wysihtml5.INVISIBLE_SPACE || tempElement.innerHTML === "<br>";
-      composer.selection.executeAndRestoreSimple(function() {
+      composer.selection.executeAndRestore(function() {
         list = wysihtml5.dom.convertToList(tempElement, "ul");
       });
       if (isEmpty) {
-        composer.selection.selectNode(list.querySelector("li"));
+        composer.selection.selectNode(list.querySelector("li"), true);
       }
     }
   },
diff --git a/src/dom/convert_to_list.js b/src/dom/convert_to_list.js
index 93335290..0ba6f324 100644
--- a/src/dom/convert_to_list.js
+++ b/src/dom/convert_to_list.js
@@ -93,6 +93,10 @@ wysihtml5.dom.convertToList = (function() {
       currentListItem.appendChild(childNode);
     }
     
+    if (childNodes.length === 0) {
+      _createListItem(doc, list);
+    }
+    
     element.parentNode.replaceChild(list, element);
     return list;
   }
diff --git a/src/dom/insert_css.js b/src/dom/insert_css.js
index a6e0210a..cb195e87 100644
--- a/src/dom/insert_css.js
+++ b/src/dom/insert_css.js
@@ -3,19 +3,24 @@ wysihtml5.dom.insertCSS = function(rules) {
   
   return {
     into: function(doc) {
-      var head         = doc.head || doc.getElementsByTagName("head")[0],
-          styleElement = doc.createElement("style");
-
+      var styleElement = doc.createElement("style");
       styleElement.type = "text/css";
-
+      
       if (styleElement.styleSheet) {
         styleElement.styleSheet.cssText = rules;
       } else {
         styleElement.appendChild(doc.createTextNode(rules));
       }
-
-      if (head) {
-        head.appendChild(styleElement);
+      
+      var link = doc.querySelector("head link");
+      if (link) {
+        link.parentNode.insertBefore(styleElement, link);
+        return;
+      } else {
+        var head = doc.querySelector("head");
+        if (head) {
+          head.appendChild(styleElement);
+        }
       }
     }
   };
diff --git a/src/dom/resolve_list.js b/src/dom/resolve_list.js
index 89e87286..1abc55e5 100644
--- a/src/dom/resolve_list.js
+++ b/src/dom/resolve_list.js
@@ -34,8 +34,8 @@
     element.appendChild(lineBreak);
   }
   
-  function resolveList(list) {
-    if (list.nodeName !== "MENU" && list.nodeName !== "UL" && list.nodeName !== "OL") {
+  function resolveList(list, useLineBreaks) {
+    if (!list.nodeName.match(/^(MENU|UL|OL)$/)) {
       return;
     }
     
@@ -46,26 +46,46 @@
         lastChild,
         isLastChild,
         shouldAppendLineBreak,
+        paragraph,
         listItem;
     
-    if (previousSibling && !_isBlockElement(previousSibling)) {
-      _appendLineBreak(fragment);
-    }
-    
-    while (listItem = list.firstChild) {
-      lastChild = listItem.lastChild;
-      while (firstChild = listItem.firstChild) {
-        isLastChild           = firstChild === lastChild;
-        // This needs to be done before appending it to the fragment, as it otherwise will loose style information
-        shouldAppendLineBreak = isLastChild && !_isBlockElement(firstChild) && !_isLineBreak(firstChild);
-        fragment.appendChild(firstChild);
-        if (shouldAppendLineBreak) {
-          _appendLineBreak(fragment);
+    if (useLineBreaks) {
+      // Insert line break if list is after a non-block element
+      if (previousSibling && !_isBlockElement(previousSibling)) {
+        _appendLineBreak(fragment);
+      }
+
+      while (listItem = (list.firstElementChild || list.firstChild)) {
+        lastChild = listItem.lastChild;
+        while (firstChild = listItem.firstChild) {
+          isLastChild           = firstChild === lastChild;
+          // This needs to be done before appending it to the fragment, as it otherwise will lose style information
+          shouldAppendLineBreak = isLastChild && !_isBlockElement(firstChild) && !_isLineBreak(firstChild);
+          fragment.appendChild(firstChild);
+          if (shouldAppendLineBreak) {
+            _appendLineBreak(fragment);
+          }
+        }
+        
+        listItem.parentNode.removeChild(listItem);
+      }
+    } else {
+      while (listItem = (list.firstElementChild || list.firstChild)) {
+        if (listItem.querySelector && listItem.querySelector("div, p, ul, ol, menu, blockquote, h1, h2, h3, h4, h5, h6")) {
+          while (firstChild = listItem.firstChild) {
+            fragment.appendChild(firstChild);
+          }
+        } else {
+          paragraph = doc.createElement("p");
+          while (firstChild = listItem.firstChild) {
+            paragraph.appendChild(firstChild);
+          }
+          fragment.appendChild(paragraph);
         }
+        listItem.parentNode.removeChild(listItem);
       }
-      
-      listItem.parentNode.removeChild(listItem);
     }
+
     list.parentNode.replaceChild(fragment, list);
   }
   
diff --git a/src/dom/simulate_placeholder.js b/src/dom/simulate_placeholder.js
index 24ba5985..0c59ccf2 100644
--- a/src/dom/simulate_placeholder.js
+++ b/src/dom/simulate_placeholder.js
@@ -31,11 +31,11 @@
         };
 
     editor
-      .observe("set_placeholder", set)
-      .observe("unset_placeholder", unset)
-      .observe("focus:composer", unset)
-      .observe("paste:composer", unset)
-      .observe("blur:composer", set);
+      .on("set_placeholder", set)
+      .on("unset_placeholder", unset)
+      .on("focus:composer", unset)
+      .on("paste:composer", unset)
+      .on("blur:composer", set);
 
     set();
   };
diff --git a/src/editor.js b/src/editor.js
index b0f06b41..891b2497 100644
--- a/src/editor.js
+++ b/src/editor.js
@@ -48,6 +48,8 @@
     composerClassName:    "wysihtml5-editor",
     // Class name to add to the body when the wysihtml5 editor is supported
     bodyClassName:        "wysihtml5-supported",
+    // By default wysihtml5 will insert a <br> for line breaks, set this to false to use <p>
+    useLineBreaks:        true,
     // Array (or single string) of stylesheet urls to be loaded in the editor's iframe
     stylesheets:          [],
     // Placeholder text to use, defaults to the placeholder attribute on the textarea element
@@ -82,7 +84,7 @@
         this._initParser();
       }
       
-      this.observe("beforeload", function() {
+      this.on("beforeload", function() {
         this.synchronizer = new wysihtml5.views.Synchronizer(this, this.textarea, this.composer);
         if (this.config.toolbar) {
           this.toolbar = new wysihtml5.toolbar.Toolbar(this, this.config.toolbar);
@@ -160,7 +162,7 @@
      *  - Observes for paste and drop
      */
     _initParser: function() {
-      this.observe("paste:composer", function() {
+      this.on("paste:composer", function() {
         var keepScrollPosition  = true,
             that                = this;
         that.composer.selection.executeAndRestore(function() {
diff --git a/src/lang/dispatcher.js b/src/lang/dispatcher.js
index 1a0eef13..59f95d53 100644
--- a/src/lang/dispatcher.js
+++ b/src/lang/dispatcher.js
@@ -1,27 +1,13 @@
 wysihtml5.lang.Dispatcher = Base.extend(
   /** @scope wysihtml5.lang.Dialog.prototype */ {
-  observe: function(eventName, handler) {
+  on: function(eventName, handler) {
     this.events = this.events || {};
     this.events[eventName] = this.events[eventName] || [];
     this.events[eventName].push(handler);
     return this;
   },
 
-  on: function() {
-    return this.observe.apply(this, wysihtml5.lang.array(arguments).get());
-  },
-
-  fire: function(eventName, payload) {
-    this.events = this.events || {};
-    var handlers = this.events[eventName] || [],
-        i        = 0;
-    for (; i<handlers.length; i++) {
-      handlers[i].call(this, payload);
-    }
-    return this;
-  },
-
-  stopObserving: function(eventName, handler) {
+  off: function(eventName, handler) {
     this.events = this.events || {};
     var i = 0,
         handlers,
@@ -40,5 +26,25 @@ wysihtml5.lang.Dispatcher = Base.extend(
       this.events = {};
     }
     return this;
+  },
+  
+  fire: function(eventName, payload) {
+    this.events = this.events || {};
+    var handlers = this.events[eventName] || [],
+        i        = 0;
+    for (; i<handlers.length; i++) {
+      handlers[i].call(this, payload);
+    }
+    return this;
+  },
+  
+  // deprecated, use .on()
+  observe: function() {
+    return this.on.apply(this, arguments);
+  },
+  
+  // deprecated, use .off()
+  stopObserving: function() {
+    return this.off.apply(this, arguments);
   }
 });
\ No newline at end of file
diff --git a/src/quirks/ensure_proper_clearing.js b/src/quirks/ensure_proper_clearing.js
index df78ee2d..690727f8 100644
--- a/src/quirks/ensure_proper_clearing.js
+++ b/src/quirks/ensure_proper_clearing.js
@@ -5,76 +5,19 @@
  * @exaple
  *    wysihtml5.quirks.ensureProperClearing(myContentEditableElement);
  */
-(function(wysihtml5) {
-  var dom = wysihtml5.dom;
-  
-  wysihtml5.quirks.ensureProperClearing = (function() {
-    var clearIfNecessary = function(event) {
-      var element = this;
-      setTimeout(function() {
-        var innerHTML = element.innerHTML.toLowerCase();
-        if (innerHTML == "<p>&nbsp;</p>" ||
-            innerHTML == "<p>&nbsp;</p><p>&nbsp;</p>") {
-          element.innerHTML = "";
-        }
-      }, 0);
-    };
-
-    return function(composer) {
-      dom.observe(composer.element, ["cut", "keydown"], clearIfNecessary);
-    };
-  })();
-
-
-
-  /**
-   * In Opera when the caret is in the first and only item of a list (<ul><li>|</li></ul>) and the list is the first child of the contentEditable element, it's impossible to delete the list by hitting backspace
-   *
-   * @param {Object} contentEditableElement The contentEditable element to observe for clearing events
-   * @exaple
-   *    wysihtml5.quirks.ensureProperClearing(myContentEditableElement);
-   */
-  wysihtml5.quirks.ensureProperClearingOfLists = (function() {
-    var ELEMENTS_THAT_CONTAIN_LI = ["OL", "UL", "MENU"];
-
-    var clearIfNecessary = function(element, contentEditableElement) {
-      if (!contentEditableElement.firstChild || !wysihtml5.lang.array(ELEMENTS_THAT_CONTAIN_LI).contains(contentEditableElement.firstChild.nodeName)) {
-        return;
-      }
-
-      var list = dom.getParentElement(element, { nodeName: ELEMENTS_THAT_CONTAIN_LI });
-      if (!list) {
-        return;
-      }
-
-      var listIsFirstChildOfContentEditable = list == contentEditableElement.firstChild;
-      if (!listIsFirstChildOfContentEditable) {
-        return;
-      }
-
-      var hasOnlyOneListItem = list.childNodes.length <= 1;
-      if (!hasOnlyOneListItem) {
-        return;
-      }
-
-      var onlyListItemIsEmpty = list.firstChild ? list.firstChild.innerHTML === "" : true;
-      if (!onlyListItemIsEmpty) {
-        return;
+wysihtml5.quirks.ensureProperClearing = (function() {
+  var clearIfNecessary = function(event) {
+    var element = this;
+    setTimeout(function() {
+      var innerHTML = element.innerHTML.toLowerCase();
+      if (innerHTML == "<p>&nbsp;</p>" ||
+          innerHTML == "<p>&nbsp;</p><p>&nbsp;</p>") {
+        element.innerHTML = "";
       }
+    }, 0);
+  };
 
-      list.parentNode.removeChild(list);
-    };
-
-    return function(composer) {
-      dom.observe(composer.element, "keydown", function(event) {
-        if (event.keyCode !== wysihtml5.BACKSPACE_KEY) {
-          return;
-        }
-
-        var element = composer.selection.getSelectedNode();
-        clearIfNecessary(element, composer.element);
-      });
-    };
-  })();
-
-})(wysihtml5);
+  return function(composer) {
+    wysihtml5.dom.observe(composer.element, ["cut", "keydown"], clearIfNecessary);
+  };
+})();
diff --git a/src/quirks/insert_line_break_on_return.js b/src/quirks/insert_line_break_on_return.js
deleted file mode 100644
index bfccf2d0..00000000
--- a/src/quirks/insert_line_break_on_return.js
+++ /dev/null
@@ -1,78 +0,0 @@
-/**
- * Some browsers don't insert line breaks when hitting return in a contentEditable element
- *    - Opera & IE insert new <p> on return
- *    - Chrome & Safari insert new <div> on return
- *    - Firefox inserts <br> on return (yippie!)
- *
- * @param {Element} element
- *
- * @example
- *    wysihtml5.quirks.insertLineBreakOnReturn(element);
- */
-(function(wysihtml5) {
-  var dom                                           = wysihtml5.dom,
-      USE_NATIVE_LINE_BREAK_WHEN_CARET_INSIDE_TAGS  = ["LI", "P", "H1", "H2", "H3", "H4", "H5", "H6"],
-      LIST_TAGS                                     = ["UL", "OL", "MENU"];
-  
-  wysihtml5.quirks.insertLineBreakOnReturn = function(composer) {
-    function unwrap(selectedNode) {
-      var parentElement = dom.getParentElement(selectedNode, { nodeName: ["P", "DIV"] }, 2);
-      if (!parentElement) {
-        return;
-      }
-
-      var invisibleSpace = document.createTextNode(wysihtml5.INVISIBLE_SPACE);
-      dom.insert(invisibleSpace).before(parentElement);
-      dom.replaceWithChildNodes(parentElement);
-      composer.selection.selectNode(invisibleSpace);
-    }
-
-    function keyDown(event) {
-      var keyCode = event.keyCode;
-      if (event.shiftKey || (keyCode !== wysihtml5.ENTER_KEY && keyCode !== wysihtml5.BACKSPACE_KEY)) {
-        return;
-      }
-
-      var element         = event.target,
-          selectedNode    = composer.selection.getSelectedNode(),
-          blockElement    = dom.getParentElement(selectedNode, { nodeName: USE_NATIVE_LINE_BREAK_WHEN_CARET_INSIDE_TAGS }, 4);
-      if (blockElement) {
-        // Some browsers create <p> elements after leaving a list
-        // check after keydown of backspace and return whether a <p> got inserted and unwrap it
-        if (blockElement.nodeName === "LI" && (keyCode === wysihtml5.ENTER_KEY || keyCode === wysihtml5.BACKSPACE_KEY)) {
-          setTimeout(function() {
-            var selectedNode = composer.selection.getSelectedNode(),
-                list,
-                div;
-            if (!selectedNode) {
-              return;
-            }
-
-            list = dom.getParentElement(selectedNode, {
-              nodeName: LIST_TAGS
-            }, 2);
-
-            if (list) {
-              return;
-            }
-
-            unwrap(selectedNode);
-          }, 0);
-        } else if (blockElement.nodeName.match(/H[1-6]/) && keyCode === wysihtml5.ENTER_KEY) {
-          setTimeout(function() {
-            unwrap(composer.selection.getSelectedNode());
-          }, 0);
-        } 
-        return;
-      }
-
-      if (keyCode === wysihtml5.ENTER_KEY && !wysihtml5.browser.insertsLineBreaksOnReturn()) {
-        composer.commands.exec("insertLineBreak");
-        event.preventDefault();
-      }
-    }
-    
-    // keypress doesn't fire when you hit backspace
-    dom.observe(composer.element.ownerDocument, "keydown", keyDown);
-  };
-})(wysihtml5);
\ No newline at end of file
diff --git a/src/selection/selection.js b/src/selection/selection.js
index 59b58cf0..4091bca7 100644
--- a/src/selection/selection.js
+++ b/src/selection/selection.js
@@ -87,7 +87,7 @@
      * @example
      *    selection.selectNode(document.getElementById("my-image"));
      */
-    selectNode: function(node) {
+    selectNode: function(node, avoidInvisibleSpace) {
       var range           = rangy.createRange(this.doc),
           isElement       = node.nodeType === wysihtml5.ELEMENT_NODE,
           canHaveHTML     = "canHaveHTML" in node ? node.canHaveHTML : (node.nodeName !== "IMG"),
@@ -96,7 +96,7 @@
           displayStyle    = dom.getStyle("display").from(node),
           isBlockElement  = (displayStyle === "block" || displayStyle === "list-item");
 
-      if (isEmpty && isElement && canHaveHTML) {
+      if (isEmpty && isElement && canHaveHTML && !avoidInvisibleSpace) {
         // Make sure that caret is visible in node by inserting a zero width no breaking space
         try { node.innerHTML = wysihtml5.INVISIBLE_SPACE; } catch(e) {}
       }
@@ -150,8 +150,12 @@
           oldScrollTop          = restoreScrollPosition && body.scrollTop,
           oldScrollLeft         = restoreScrollPosition && body.scrollLeft,
           className             = "_wysihtml5-temp-placeholder",
-          placeholderHTML       = '<span class="' + className + '">' + wysihtml5.INVISIBLE_SPACE + '</span>',
+          placeholderHtml       = '<span class="' + className + '">' + wysihtml5.INVISIBLE_SPACE + '</span>',
           range                 = this.getRange(this.doc),
+          caretPlaceholder,
+          newCaretPlaceholder,
+          nextSibling,
+          node,
           newRange;
       
       // Nothing selected, execute and say goodbye
@@ -160,21 +164,34 @@
         return;
       }
       
-      var node = range.createContextualFragment(placeholderHTML);
-      range.insertNode(node);
+      if (wysihtml5.browser.hasInsertNodeIssue()) {
+        this.doc.execCommand("insertHTML", false, placeholderHtml);
+      } else {
+        node = range.createContextualFragment(placeholderHtml);
+        range.insertNode(node);
+      }
       
       // Make sure that a potential error doesn't cause our placeholder element to be left as a placeholder
       try {
         method(range.startContainer, range.endContainer);
-      } catch(e3) {
-        setTimeout(function() { throw e3; }, 0);
+      } catch(e) {
+        setTimeout(function() { throw e; }, 0);
       }
       
       caretPlaceholder = this.doc.querySelector("." + className);
       if (caretPlaceholder) {
         newRange = rangy.createRange(this.doc);
-        newRange.selectNode(caretPlaceholder);
-        newRange.deleteContents();
+        nextSibling = caretPlaceholder.nextSibling;
+        // Opera is so fucked up when you wanna set focus before a <br>
+        if (wysihtml5.browser.hasInsertNodeIssue() && nextSibling && nextSibling.nodeName === "BR") {
+          newCaretPlaceholder = this.doc.createTextNode(wysihtml5.INVISIBLE_SPACE);
+          dom.insert(newCaretPlaceholder).after(caretPlaceholder);
+          newRange.setStartBefore(newCaretPlaceholder);
+          newRange.setEndBefore(newCaretPlaceholder);
+        } else {
+          newRange.selectNode(caretPlaceholder);
+          newRange.deleteContents();
+        }
         this.setSelection(newRange);
       } else {
         // fallback for when all hell breaks loose
@@ -189,7 +206,7 @@
       // Remove it again, just to make sure that the placeholder is definitely out of the dom tree
       try {
         caretPlaceholder.parentNode.removeChild(caretPlaceholder);
-      } catch(e4) {}
+      } catch(e2) {}
     },
 
     /**
diff --git a/src/toolbar/toolbar.js b/src/toolbar/toolbar.js
index 5fb68cd2..60a558e4 100644
--- a/src/toolbar/toolbar.js
+++ b/src/toolbar/toolbar.js
@@ -79,13 +79,13 @@
       if (dialogElement) {
         dialog = new wysihtml5.toolbar.Dialog(link, dialogElement);
 
-        dialog.observe("show", function() {
+        dialog.on("show", function() {
           caretBookmark = that.composer.selection.getBookmark();
 
           that.editor.fire("show:dialog", { command: command, dialogContainer: dialogElement, commandLink: link });
         });
 
-        dialog.observe("save", function(attributes) {
+        dialog.on("save", function(attributes) {
           if (caretBookmark) {
             that.composer.selection.setBookmark(caretBookmark);
           }
@@ -94,7 +94,7 @@
           that.editor.fire("save:dialog", { command: command, dialogContainer: dialogElement, commandLink: link });
         });
 
-        dialog.observe("cancel", function() {
+        dialog.on("cancel", function() {
           that.editor.focus(false);
           that.editor.fire("cancel:dialog", { command: command, dialogContainer: dialogElement, commandLink: link });
         });
@@ -178,21 +178,21 @@
         event.preventDefault();
       });
 
-      editor.observe("focus:composer", function() {
+      editor.on("focus:composer", function() {
         that.bookmark = null;
         clearInterval(that.interval);
         that.interval = setInterval(function() { that._updateLinkStates(); }, 500);
       });
 
-      editor.observe("blur:composer", function() {
+      editor.on("blur:composer", function() {
         clearInterval(that.interval);
       });
 
-      editor.observe("destroy:composer", function() {
+      editor.on("destroy:composer", function() {
         clearInterval(that.interval);
       });
 
-      editor.observe("change_view", function(currentView) {
+      editor.on("change_view", function(currentView) {
         // Set timeout needed in order to let the blur event fire first
         setTimeout(function() {
           that.commandsDisabled = (currentView !== "composer");
diff --git a/src/undo_manager.js b/src/undo_manager.js
index 2f56ceae..60261271 100644
--- a/src/undo_manager.js
+++ b/src/undo_manager.js
@@ -121,11 +121,11 @@
       }
       
       this.editor
-        .observe("newword:composer", function() {
+        .on("newword:composer", function() {
           that.transact();
         })
         
-        .observe("beforecommand:composer", function() {
+        .on("beforecommand:composer", function() {
           that.transact();
         });
     },
diff --git a/src/views/composer.js b/src/views/composer.js
index e0cd9c85..7c0f5eb4 100644
--- a/src/views/composer.js
+++ b/src/views/composer.js
@@ -101,12 +101,12 @@
     },
 
     isEmpty: function() {
-      var innerHTML               = this.element.innerHTML,
-          elementsWithVisualValue = "blockquote, ul, ol, img, embed, object, table, iframe, svg, video, audio, button, input, select, textarea";
-      return innerHTML === ""              || 
-             innerHTML === this.CARET_HACK ||
-             this.hasPlaceholderSet()      ||
-             (this.getTextContent() === "" && !this.element.querySelector(elementsWithVisualValue));
+      var innerHTML = this.element.innerHTML.toLowerCase();
+      return innerHTML === ""            ||
+             innerHTML === "<br>"        ||
+             innerHTML === "<p></p>"     ||
+             innerHTML === "<p><br></p>" ||
+             this.hasPlaceholderSet();
     },
 
     _initSandbox: function() {
@@ -180,23 +180,18 @@
       this._initAutoLinking();
       this._initObjectResizing();
       this._initUndoManager();
-
+      this._initLineBreaking();
+      
       // Simulate html5 autofocus on contentEditable element
       if (this.textarea.element.hasAttribute("autofocus") || document.querySelector(":focus") == this.textarea.element) {
         setTimeout(function() { that.focus(true); }, 100);
       }
 
-      wysihtml5.quirks.insertLineBreakOnReturn(this);
-
       // IE sometimes leaves a single paragraph, which can't be removed by the user
       if (!browser.clearsContentEditableCorrectly()) {
         wysihtml5.quirks.ensureProperClearing(this);
       }
 
-      if (!browser.clearsListsInContentEditableCorrectly()) {
-        wysihtml5.quirks.ensureProperClearingOfLists(this);
-      }
-
       // Set up a sync that makes sure that textarea and editor have the same content
       if (this.initSync && this.config.sync) {
         this.initSync();
@@ -224,10 +219,12 @@
       // Only do the auto linking by ourselves when the browser doesn't support auto linking
       // OR when he supports auto linking but we were able to turn it off (IE9+)
       if (!supportsAutoLinking || (supportsAutoLinking && supportsDisablingOfAutoLinking)) {
-        this.parent.observe("newword:composer", function() {
-          that.selection.executeAndRestore(function(startContainer, endContainer) {
-            dom.autoLink(endContainer.parentNode);
-          });
+        this.parent.on("newword:composer", function() {
+          if (dom.getTextContent(that.element).match(dom.autoLink.URL_REG_EXP)) {
+            that.selection.executeAndRestore(function(startContainer, endContainer) {
+              dom.autoLink(endContainer.parentNode);
+            });
+          }
         });
         
         dom.observe(this.element, "blur", function() {
@@ -321,6 +318,85 @@
     
     _initUndoManager: function() {
       this.undoManager = new wysihtml5.UndoManager(this.parent);
+    },
+    
+    _initLineBreaking: function() {
+      var that                              = this,
+          USE_NATIVE_LINE_BREAK_INSIDE_TAGS = ["LI", "P", "H1", "H2", "H3", "H4", "H5", "H6"],
+          LIST_TAGS                         = ["UL", "OL", "MENU"];
+      
+      function adjust(selectedNode) {
+        var parentElement = dom.getParentElement(selectedNode, { nodeName: ["P", "DIV"] }, 2);
+        if (parentElement) {
+          that.selection.executeAndRestore(function() {
+            if (that.config.useLineBreaks) {
+              dom.replaceWithChildNodes(parentElement);
+            } else if (parentElement.nodeName !== "P") {
+              dom.renameElement(parentElement, "p");
+            }
+          });
+        }
+      }
+      
+      if (!this.config.useLineBreaks) {
+        dom.observe(this.element, ["focus", "keydown"], function() {
+          if (that.isEmpty()) {
+            var paragraph = that.doc.createElement("P");
+            that.element.innerHTML = "";
+            that.element.appendChild(paragraph);
+            if (!browser.displaysCaretInEmptyContentEditableCorrectly()) {
+              paragraph.innerHTML = "<br>";
+              that.selection.setBefore(paragraph.firstChild);
+            } else {
+              that.selection.selectNode(paragraph, true);
+            }
+          }
+        });
+      }
+      
+      dom.observe(this.doc, "keydown", function(event) {
+        var keyCode = event.keyCode;
+        
+        if (event.shiftKey) {
+          return;
+        }
+        
+        if (keyCode !== wysihtml5.ENTER_KEY && keyCode !== wysihtml5.BACKSPACE_KEY) {
+          return;
+        }
+        
+        var blockElement = dom.getParentElement(that.selection.getSelectedNode(), { nodeName: USE_NATIVE_LINE_BREAK_INSIDE_TAGS }, 4);
+        if (blockElement) {
+          setTimeout(function() {
+            // Unwrap paragraph after leaving a list or a H1-6
+            var selectedNode = that.selection.getSelectedNode(),
+                isHeadline,
+                list;
+            
+            if (blockElement.nodeName === "LI") {
+              if (!selectedNode) {
+                return;
+              }
+
+              list = dom.getParentElement(selectedNode, { nodeName: LIST_TAGS }, 2);
+
+              if (!list) {
+                adjust(selectedNode);
+              }
+            }
+
+            if (keyCode === wysihtml5.ENTER_KEY && blockElement.nodeName.match(/^H[1-6]$/)) {
+              adjust(selectedNode);
+            }
+          }, 0);
+          return;
+        }
+        
+        if (that.config.useLineBreaks && keyCode === wysihtml5.ENTER_KEY && !wysihtml5.browser.insertsLineBreaksOnReturn()) {
+          that.commands.exec("insertLineBreak");
+          event.preventDefault();
+        }
+      });
     }
   });
 })(wysihtml5);
\ No newline at end of file
diff --git a/src/views/composer.observe.js b/src/views/composer.observe.js
index 89ec93a0..4d4658a7 100644
--- a/src/views/composer.observe.js
+++ b/src/views/composer.observe.js
@@ -96,7 +96,7 @@
       }
     });
 
-    this.parent.observe("paste:composer", function() {
+    this.parent.on("paste:composer", function() {
       setTimeout(function() { that.parent.fire("newword:composer"); }, 0);
     });
 
diff --git a/src/views/composer.style.js b/src/views/composer.style.js
index b7016273..acbd14cd 100644
--- a/src/views/composer.style.js
+++ b/src/views/composer.style.js
@@ -46,15 +46,16 @@
         "top", "left", "right", "bottom"
       ],
       ADDITIONAL_CSS_RULES = [
-        "html             { height: 100%; }",
-        "body             { min-height: 100%; padding: 0; margin: 0; margin-top: -1px; padding-top: 1px; }",
-        "._wysihtml5-temp { display: none; }",
+        "html                 { height: 100%; }",
+        "body                 { min-height: 100%; padding: 0; margin: 0; margin-top: -1px; padding-top: 1px; }",
+        "body > p:first-child { margin-top: 0; }",
+        "._wysihtml5-temp     { display: none; }",
         wysihtml5.browser.isGecko ?
-          "body.placeholder { color: graytext !important; }" : 
-          "body.placeholder { color: #a9a9a9 !important; }",
-        "body[disabled]   { background-color: #eee !important; color: #999 !important; cursor: default !important; }",
+          "body.placeholder   { color: graytext !important; }" : 
+          "body.placeholder   { color: #a9a9a9 !important; }",
+        "body[disabled]       { background-color: #eee !important; color: #999 !important; cursor: default !important; }",
         // Ensure that user see's broken images and can delete them
-        "img:-moz-broken  { -moz-force-broken-image-icon: 1; height: 24px; width: 24px; }"
+        "img:-moz-broken      { -moz-force-broken-image-icon: 1; height: 24px; width: 24px; }"
       ];
   
   /**
@@ -164,12 +165,12 @@
     }
     
     // --------- Sync focus/blur styles ---------
-    this.parent.observe("focus:composer", function() {
+    this.parent.on("focus:composer", function() {
       dom.copyStyles(boxFormattingStyles) .from(that.focusStylesHost).to(that.iframe);
       dom.copyStyles(TEXT_FORMATTING)     .from(that.focusStylesHost).to(that.element);
     });
     
-    this.parent.observe("blur:composer", function() {
+    this.parent.on("blur:composer", function() {
       dom.copyStyles(boxFormattingStyles) .from(that.blurStylesHost).to(that.iframe);
       dom.copyStyles(TEXT_FORMATTING)     .from(that.blurStylesHost).to(that.element);
     });
diff --git a/src/views/synchronizer.js b/src/views/synchronizer.js
index 094e884e..b28855fa 100644
--- a/src/views/synchronizer.js
+++ b/src/views/synchronizer.js
@@ -81,7 +81,7 @@
         });
       }
 
-      this.editor.observe("change_view", function(view) {
+      this.editor.on("change_view", function(view) {
         if (view === "composer" && !interval) {
           that.fromTextareaToComposer(true);
           startInterval();
@@ -91,7 +91,7 @@
         }
       });
 
-      this.editor.observe("destroy:composer", stopInterval);
+      this.editor.on("destroy:composer", stopInterval);
     }
   });
 })(wysihtml5);
diff --git a/src/views/textarea.js b/src/views/textarea.js
index 3a64327d..84df8b02 100644
--- a/src/views/textarea.js
+++ b/src/views/textarea.js
@@ -52,7 +52,7 @@ wysihtml5.views.Textarea = wysihtml5.views.View.extend(
          */
         events = wysihtml5.browser.supportsEvent("focusin") ? ["focusin", "focusout", "change"] : ["focus", "blur", "change"];
     
-    parent.observe("beforeload", function() {
+    parent.on("beforeload", function() {
       wysihtml5.dom.observe(element, events, function(event) {
         var eventName = eventMapping[event.type] || event.type;
         parent.fire(eventName).fire(eventName + ":textarea");
diff --git a/src/views/view.js b/src/views/view.js
index a161d5b3..452ac0fc 100644
--- a/src/views/view.js
+++ b/src/views/view.js
@@ -13,8 +13,8 @@ wysihtml5.views.View = Base.extend(
   
   _observeViewChange: function() {
     var that = this;
-    this.parent.observe("beforeload", function() {
-      that.parent.observe("change_view", function(view) {
+    this.parent.on("beforeload", function() {
+      that.parent.on("change_view", function(view) {
         if (view === that.name) {
           that.parent.currentView = that;
           that.show();
diff --git a/test/dom/insert_css_test.js b/test/dom/insert_css_test.js
index 7dbca09f..a900ec4e 100644
--- a/test/dom/insert_css_test.js
+++ b/test/dom/insert_css_test.js
@@ -1,31 +1,51 @@
-module("wysihtml5.dom.insertCSS", {
-  teardown: function() {
-    var iframe;
-    while (iframe = document.querySelector("iframe.wysihtml5-sandbox")) {
-      iframe.parentNode.removeChild(iframe);
+if (wysihtml5.browser.supported()) {
+
+  module("wysihtml5.dom.insertCSS", {
+    teardown: function() {
+      var iframe;
+      while (iframe = document.querySelector("iframe.wysihtml5-sandbox")) {
+        iframe.parentNode.removeChild(iframe);
+      }
     }
-  }
-});
+  });
 
-asyncTest("Basic Tests", function() {
-  expect(3);
+  asyncTest("Basic Tests", function() {
+    expect(3);
   
-  new wysihtml5.dom.Sandbox(function(sandbox) {
-    var doc     = sandbox.getDocument(),
-        body    = doc.body,
-        element = doc.createElement("sub");
+    new wysihtml5.dom.Sandbox(function(sandbox) {
+      var doc     = sandbox.getDocument(),
+          body    = doc.body,
+          element = doc.createElement("sub");
     
-    body.appendChild(element);
+      body.appendChild(element);
     
-    wysihtml5.dom.insertCSS([
-      "sub  { display: block; text-align: right; }",
-      "body { text-indent: 50px; }"
-    ]).into(doc);
+      wysihtml5.dom.insertCSS([
+        "sub  { display: block; text-align: right; }",
+        "body { text-indent: 50px; }"
+      ]).into(doc);
     
-    equal(wysihtml5.dom.getStyle("display")    .from(element), "block");
-    equal(wysihtml5.dom.getStyle("text-align") .from(element), "right");
-    equal(wysihtml5.dom.getStyle("text-indent").from(element), "50px");
+      equal(wysihtml5.dom.getStyle("display")    .from(element), "block");
+      equal(wysihtml5.dom.getStyle("text-align") .from(element), "right");
+      equal(wysihtml5.dom.getStyle("text-indent").from(element), "50px");
     
-    start();
-  }).insertInto(document.body);
-});
\ No newline at end of file
+      start();
+    }).insertInto(document.body);
+  });
+
+  asyncTest("Check whether CSS is inserted before any loaded stylesheets", function() {
+    expect(1);
+  
+    new wysihtml5.dom.Sandbox(function(sandbox) {
+      var doc = sandbox.getDocument();
+      
+      wysihtml5.dom.insertCSS([".foo {}"]).into(doc);
+      
+      ok(doc.querySelector("style[type='text/css'] + link[rel=stylesheet]"), "CSS has been inserted before any included stylesheet");
+      
+      start();
+    },  {
+      stylesheets: "https://ajax.googleapis.com/ajax/libs/jqueryui/1.7.2/themes/blitzer/jquery-ui.css"
+    }).insertInto(document.body);
+  });
+  
+}
\ No newline at end of file
diff --git a/test/dom/resolve_list_test.js b/test/dom/resolve_list_test.js
index 46129859..9efcd306 100644
--- a/test/dom/resolve_list_test.js
+++ b/test/dom/resolve_list_test.js
@@ -3,44 +3,76 @@ module("wysihtml5.dom.resolveList", {
     return wysihtml5.assert.htmlEqual(actual, expected, message);
   },
   
-  resolveList: function(html) {
+  resolveList: function(html, useLineBreaks) {
     var container = wysihtml5.dom.getAsDom(html);
     document.body.appendChild(container);
-    wysihtml5.dom.resolveList(container.firstChild);
+    wysihtml5.dom.resolveList(container.firstChild, useLineBreaks);
     var innerHTML = container.innerHTML;
     container.parentNode.removeChild(container);
     return innerHTML;
   }
 });
 
-test("Basic tests", function() {
+test("Basic tests (useLineBreaks = true)", function() {
   this.equal(
-    this.resolveList("<ul><li>foo</li></ul>"),
+    this.resolveList("<ul><li>foo</li></ul>", true),
     "foo<br>"
   );
   
   this.equal(
-    this.resolveList("<ul><li>foo</li><li>bar</li></ul>"),
+    this.resolveList("<ul><li>foo</li><li>bar</li></ul>", true),
     "foo<br>bar<br>"
   );
   
   this.equal(
-    this.resolveList("<ol><li>foo</li><li>bar</li></ol>"),
+    this.resolveList("<ol><li>foo</li><li>bar</li></ol>", true),
     "foo<br>bar<br>"
   );
   
   this.equal(
-    this.resolveList("<ol><li></li><li>bar</li></ol>"),
+    this.resolveList("<ol><li></li><li>bar</li></ol>", true),
     "bar<br>"
   );
   
   this.equal(
-    this.resolveList("<ol><li>foo<br></li><li>bar</li></ol>"),
+    this.resolveList("<ol><li>foo<br></li><li>bar</li></ol>", true),
     "foo<br>bar<br>"
   );
   
   this.equal(
-    this.resolveList("<ul><li><h1>foo</h1></li><li><div>bar</div></li><li>baz</li></ul>"),
+    this.resolveList("<ul><li><h1>foo</h1></li><li><div>bar</div></li><li>baz</li></ul>", true),
     "<h1>foo</h1><div>bar</div>baz<br>"
   );
 });
+
+test("Basic tests (useLineBreaks = false)", function() {
+  this.equal(
+    this.resolveList("<ul><li>foo</li></ul>"),
+    "<p>foo</p>"
+  );
+  
+  this.equal(
+    this.resolveList("<ul><li>foo</li><li>bar</li></ul>"),
+    "<p>foo</p><p>bar</p>"
+  );
+  
+  this.equal(
+    this.resolveList("<ol><li>foo</li><li>bar</li></ol>"),
+    "<p>foo</p><p>bar</p>"
+  );
+  
+  this.equal(
+    this.resolveList("<ol><li></li><li>bar</li></ol>"),
+    "<p></p><p>bar</p>"
+  );
+  
+  this.equal(
+    this.resolveList("<ol><li>foo<br></li><li>bar</li></ol>"),
+    "<p>foo<br></p><p>bar</p>"
+  );
+  
+  this.equal(
+    this.resolveList("<ul><li><h1>foo</h1></li><li><div>bar</div></li><li>baz</li></ul>"),
+    "<h1>foo</h1><div>bar</div><p>baz</p>"
+  );
+});
\ No newline at end of file
diff --git a/test/editor_test.js b/test/editor_test.js
index 3083f788..020703cb 100644
--- a/test/editor_test.js
+++ b/test/editor_test.js
@@ -45,7 +45,7 @@ if (wysihtml5.browser.supported()) {
     var that = this;
     
     var editor = new wysihtml5.Editor(this.textareaElement);
-    editor.observe("load", function() {
+    editor.on("load", function() {
       var iframeElement   = that.getIframeElement(),
           composerElement = that.getComposerElement(),
           textareaElement = that.textareaElement;
@@ -98,7 +98,7 @@ if (wysihtml5.browser.supported()) {
         name   = "star-wars-input",
         editor = new wysihtml5.Editor(this.textareaElement, { name: "star-wars-input" });
     
-    editor.observe("load", function() {
+    editor.on("load", function() {
       var iframeElement   = that.getIframeElement(),
           composerElement = that.getComposerElement(),
           textareaElement = that.textareaElement;
@@ -124,7 +124,7 @@ if (wysihtml5.browser.supported()) {
     }).on(this.textareaElement);
   
     var editor = new wysihtml5.Editor(this.textareaElement);
-    editor.observe("load", function() {
+    editor.on("load", function() {
       // Make textarea visible for a short amount of time, in order to calculate dimensions properly
       that.textareaElement.style.display = "block";
       deepEqual(
@@ -145,7 +145,7 @@ if (wysihtml5.browser.supported()) {
     var that = this;
     
     var editor = new wysihtml5.Editor(this.textareaElement);
-    editor.observe("load", function() {
+    editor.on("load", function() {
       equal(that.getComposerElement().title, that.textareaElement.title, "Editor got attributes copied over from textarea");
       start();
     });
@@ -159,35 +159,35 @@ if (wysihtml5.browser.supported()) {
     
     var editor = new wysihtml5.Editor(this.textareaElement);
     
-    editor.observe("beforeload", function() {
+    editor.on("beforeload", function() {
       ok(true, "'beforeload' event correctly fired");
     });
     
-    editor.observe("load", function() {
+    editor.on("load", function() {
       var composerElement = that.getComposerElement(),
           iframeElement   = that.getIframeElement();
       
-      editor.observe("focus", function() {
+      editor.on("focus", function() {
         ok(true, "'focus' event correctly fired");
       });
       
-      editor.observe("blur", function() {
+      editor.on("blur", function() {
         ok(true, "'blur' event correctly fired");
       });
       
-      editor.observe("change", function() {
+      editor.on("change", function() {
         ok(true, "'change' event correctly fired");
       });
       
-      editor.observe("paste", function() {
+      editor.on("paste", function() {
         ok(true, "'paste' event correctly fired");
       });
       
-      editor.observe("drop", function() {
+      editor.on("drop", function() {
         ok(true, "'drop' event correctly fired");
       });
       
-      editor.observe("custom_event", function() {
+      editor.on("custom_event", function() {
         ok(true, "'custom_event' correctly fired");
       });
       
@@ -217,7 +217,7 @@ if (wysihtml5.browser.supported()) {
     var that = this;
     
     var editor = new wysihtml5.Editor(this.textareaElement);
-    editor.observe("load", function() {
+    editor.on("load", function() {
       var html = "<p>hello foobar, what up?</p>";
       that.getComposerElement().innerHTML = html;
     
@@ -238,7 +238,7 @@ if (wysihtml5.browser.supported()) {
       parserRules: { tags: { "strong": true } }
     });
     
-    editor.observe("load", function() {
+    editor.on("load", function() {
       var html = "<strong>timmay!</strong>",
           composerElement = that.getComposerElement();
       composerElement.innerHTML = html;
@@ -285,7 +285,7 @@ if (wysihtml5.browser.supported()) {
     this.textareaElement.setAttribute("placeholder", "enter text ...");
     
     var editor = new wysihtml5.Editor(this.textareaElement);
-    editor.observe("load", function() {
+    editor.on("load", function() {
       var composerElement = that.getComposerElement();
       equal(wysihtml5.dom.getTextContent(composerElement), placeholderText, "Placeholder text correctly copied into textarea");
       ok(wysihtml5.dom.hasClass(composerElement, "placeholder"), "Editor got 'placeholder' css class");
@@ -335,7 +335,7 @@ if (wysihtml5.browser.supported()) {
       composerClassName:  "editor"
     });
     
-    editor.observe("load", function() {
+    editor.on("load", function() {
       ok(editor.isCompatible(), "isCompatible() returns correct value");
       ok(wysihtml5.dom.hasClass(document.body, "editor-is-supported"), "<body> received correct class name");
       
@@ -392,7 +392,7 @@ if (wysihtml5.browser.supported()) {
       parserRules: parserRules
     });
     
-    editor.observe("load", function() {
+    editor.on("load", function() {
       equal(editor.config.parserRules, parserRules, "Parser rules correctly set on config object");
       // Invoke parsing via second parameter of setValue()
       editor.setValue(input, true);
@@ -420,7 +420,7 @@ if (wysihtml5.browser.supported()) {
       }
     });
     
-    editor.observe("load", function() {
+    editor.on("load", function() {
       input   = "<p>foobar</p><script>alert(1);</script>";
       output  = "<p>foobar</p>";
       
@@ -439,7 +439,7 @@ if (wysihtml5.browser.supported()) {
     var that = this;
     
     var editor = new wysihtml5.Editor(this.textareaElement);
-    editor.observe("load", function() {
+    editor.on("load", function() {
       var html            = '<img>',
           composerElement = that.getComposerElement(),
           textareaElement = that.textareaElement;
@@ -474,7 +474,7 @@ if (wysihtml5.browser.supported()) {
       stylesheets: stylesheetUrls
     });
     
-    editor.observe("load", function() {
+    editor.on("load", function() {
       var iframeElement = that.getIframeElement(),
           iframeDoc     = iframeElement.contentWindow.document,
           linkElements  = iframeDoc.getElementsByTagName("link");
@@ -500,7 +500,7 @@ if (wysihtml5.browser.supported()) {
       supportTouchDevices: false
     });
     
-    editor.observe("load", function() {
+    editor.on("load", function() {
       ok(!that.getIframeElement(), "No editor iframe has been inserted");
       equal(that.textareaElement.style.display, "", "Textarea is visible");
       
@@ -518,7 +518,7 @@ if (wysihtml5.browser.supported()) {
     var editor = new wysihtml5.Editor(textareaElement);
     
     var that = this;
-    editor.observe("load", function() {
+    editor.on("load", function() {
       ok(!document.querySelector("input[name='_wysihtml5_mode']"), "No hidden _wysihtml5_mode input has been created");
       ok(that.getIframeElement(), "Editor's iframe has been created");
       equal(textareaElement.style.display, "none", "Textarea is not visible");
diff --git a/test/incompatible_test.js b/test/incompatible_test.js
index f9005d0c..e0c86294 100644
--- a/test/incompatible_test.js
+++ b/test/incompatible_test.js
@@ -24,7 +24,7 @@ asyncTest("Basic test", function() {
   var oldInputsLength = document.getElementsByTagName("input").length;
   
   var editor = new wysihtml5.Editor(this.textareaElement);
-  editor.observe("load", function() {
+  editor.on("load", function() {
     ok(true, "'load' event correctly triggered");
     ok(!wysihtml5.dom.hasClass(document.body, "wysihtml5-supported"), "<body> didn't receive the 'wysihtml5-supported' class");
     ok(!editor.isCompatible(), "isCompatible returns false when rich text editing is not correctly supported in the current browser");
@@ -41,15 +41,15 @@ asyncTest("Basic test", function() {
     editor.clear();
     equal(that.textareaElement.value, "");
     
-    editor.observe("focus", function() {
+    editor.on("focus", function() {
       ok(true, "Generic 'focus' event fired");
     });
     
-    editor.observe("focus:textarea", function() {
+    editor.on("focus:textarea", function() {
       ok(true, "Specific 'focus:textarea' event fired");
     });
     
-    editor.observe("focus:composer", function() {
+    editor.on("focus:composer", function() {
       ok(false, "Specific 'focus:composer' event fired, and that's wrong, there shouldn't be a composer element/view");
     });
     
diff --git a/test/index.html b/test/index.html
index efd0cb94..21aab4c3 100644
--- a/test/index.html
+++ b/test/index.html
@@ -45,7 +45,6 @@
 <script src="../src/quirks/clean_pasted_html.js"></script>
 <script src="../src/quirks/ensure_proper_clearing.js"></script>
 <script src="../src/quirks/get_correct_inner_html.js"></script>
-<script src="../src/quirks/insert_line_break_on_return.js"></script>
 <script src="../src/quirks/redraw.js"></script>
 <script src="../src/selection/selection.js"></script>
 <script src="../src/selection/html_applier.js"></script>