I love the new inline editing feature, in theory!  But I've found a couple of issues meaning I've had to switch it off again.

1.

With Content Workflow switched on, it fails to save any changes. I have repro'd this on the demo site. I imagine it should update the live content.

2.

Without Content Workflow switched on, it is mangling the html content on my site. Again I've repro'd this exactly on the demo site. For example, I started with this html:

<p>This&nbsp;web&nbsp;site&nbsp;is designed to support all&nbsp;users and&nbsp;system administrators&nbsp;of the Historic Buildings, Sites and Monuments Records (HBSMR)&nbsp;system from&nbsp;<a href="http://www.esdm.co.uk" target="_blank">exeGesIS&nbsp;SDM</a>.&nbsp;&nbsp;It is&nbsp;organised into two main sections, a <a href="/user-guide">user guide</a> describing&nbsp;how to operate the HBSMR application, and&nbsp;&nbsp;a <a href="/administration-guide">system&nbsp;administration guide</a> covering&nbsp;configuration of the system, advanced functionality,&nbsp;and management of reference data sets.</p>

Then I clicked the anchor and types "test." at the end of my paragraph. I clicked out of the content area to trigger the save. I then refreshed the page (F5), and the html had turned into this:

<p>This&nbsp;web&nbsp;site&nbsp;is designed to support all&nbsp;users and&nbsp;system administrators&nbsp;of the Historic Buildings, Sites and Monuments Records (HBSMR)&nbsp;system from&nbsp;SDM.&nbsp;&nbsp;It is&nbsp;how to operate the HBSMR application, and&nbsp;&nbsp;administration guide covering&nbsp;configuration of the system, advanced functionality,&nbsp;<a href="http://www.esdm.co.uk" target="_blank">exeGesIS&nbsp;organised into two main sections, a </a><a href="/user-guide">user guide</a> describing&nbsp;a <a href="/administration-guide">system&nbsp;and management of reference data sets. test.</a></p>

I cleaned out all the "&nbsp;" from the starting html, and then the editing worked fine, so I hope that helps find the bug. I tested this in IE9 and Chrome - same result.

Another issue I have encountered - locally and on the demo site - is the "lock" icon suddenly dissapearing after an edit/update.  I have not been able to get the icon back even when closing my browser and then opening/reconnecting.

Sorry - I wasn't clear... first enter the html using the normal edit process. Then use inline editing to add the word "test" to the end, and click out of the content to trigger the save. Refresh the page to see the garbled result.

Yes that has fixed it for that particular example, but I'm not sure how to do a more thorough test as I couldn't deduce the logic governing what html might get mangled or not. It had something to do with the entity references and anchors. Happy to test more if there are risk areas.

We'll give it a go on a production site (assuming you are going to put out a hotfix!) and report back if there are any problems.  But, the issue with it not saving if the user clicks the padlock without first clicking out of the content, plus the content workflow thing, do still compromise what will be a very impressive feature. Also I am finding the padlock goes walkabout in strange ways, perhaps explaining what Joe Vago reported. For me it just appears in different places (vertically) for no apparent reason.

Content workflow. Inline editing when the page is displaying "Live content" works fine for me. When the page is displaying "Work in progress" but there is no existing draft, it doesn't work: for some reason, clicking out of the edited content triggers a GET on the page itself, instead of a POST of the changed content. When the page is displaying "Work in progress"  and there is already a draft version, clicking out of the edited content triggers a POST to HTMLEditService.aspx and saves correctly.

Padlock closed after editing but before saving: the problem remains, blocking the save, in both IE9 and Chrome.

Lock/unlock icon: positioning  this with the other links seems sensible.