Microsoft has a fair WYSIWIG HTML editor - while this is probably not what you originally wanted, it just might serve your needs.
Extending Visual Studio[
^] could make sense - it all depends on your application...
If you are not working on a contender, why not consider integrating with it? You get tons of functionality for free that might make your customers quite happy.
Or you can try to roll your own editor - can't find any free/open source stuff that fits your needs :(
If you feel like throwing a lot of work into this you can look at the following:
This is a Gecko based project
http://kmeleon.sourceforge.net/[
^], turning it into an xhtml editor would be a non-trivial project :-\
http://www.w3.org/Amaya/[
^] supports xhtml
Regards
Espen Harlinn