ok, I'm not sure what is happening here, this is something recent.
when in full reply mode, using IE 8 and 7 on 3 different machines, when you click on the smile menu, or the img, the menu doesn't appear. BUT... it works here, just not on my site all of a sudden.
I have made no changes to anything, I don't see anything out of the ordinary.. and I have some users claiming it is now happening to them even in firefox.