Hi,
A couple of things I came across that might be problems:
1) fnEscapeHTML should add /g to the regex's:
return html.replace(/&/g, '&').replace(/</g, '<').replace(/>/g,
'>');
2) The line in fnAddNote: newArea.appendChild(newID);
should be: newNote.appendChild(newID);
3) Also, when adding a new note, I think you need to set the title
attribute of the 'fn-note-id' span to whatever the noteID is in
fnEditComplete, or people will get errors when they try to edit a note
that they've just added in the same session.
BTW, I love this app you've created - thank you! I'm in the process
of modifying it to work with MediaWiki software so people can add
annotations to uploaded images. It's been a pretty straightforward
modification. If you're interested, I'll give you the modification
when I'm done.