Our colleagues from the RadControls team have taken care of such issues. Please check the following KB article - http://www.telerik.com/support/kb/aspnet-ajax/editor/support-for-iphone-browser.aspx
Let us know if you need any further information.
Try reloading the page.
After I hit "I'm done", I the bullets become numbers with arrows next to them, and the line breaks and white line disappear. In fact, I wouldn't insert the white horizontal line if a line break would do the job, but even within the editor the line breaks are removed after I enter them.
//cursor was here