This morning, a colleague in Texas wrote me with this question:
You may recall that I'd written about this recently here. Today, I had a chance to stand next to a team-mate and coach them through the solution I ended up sending the person asking the question above.
1) Make sure you are running Moodle 1.9.11. It provides support for various browsers. Upgrading is a straightforward process; how to video appears here - http://moodlemayhem.org
2) Install Terra Internet Browser (it's free). Safari on your iPad won't work, nor will a browser identifying itself as Safari iPad work. You need a different browser and Terra is it. After installing Terra, you will need to click on the gear indicating preferences and change how Terra identifies itself to Firefox 3.6.
I just double-checked this solution 2 minutes ago so it works. This gives you full access to the HTML editor when posting/replying in the Forum, etc.