I found a solution to the P vs BR issue

... I should warned you, it's ugly. But it works.

If you read https://bugzilla.mozilla.org/show_bug.cgi?id=285873, you'll see that while it's true that Moz will insert BR tags on carriage return, it will also start creating paragraphs *as long as it had a paragraph to start with*.

So, the solution is ugly but it works: on the server side, detect Moz, and 'prime' the editor with <p>&nbsp;</p>.

When you give the editor focus, you'll see that rather than staying blank as usual, the 'font format' drop down will swith to 'normal' and that pressing enter starts creating paragraphs rather than BRs *but only after the second line is entered*.

So.. it works as such:
Click the editor (give it focus)
Type 'test' <enter>
Type 'test2' <enter>
Type 'test3' <enter>

The output will be :
<p>test</p>
<p>test2</p>
<p>test3&nbsp;</p>

Yes I know, it's not perfect because of the trailing &nbsp but I guess you'll just have to live with it.

*Assuming* that your users don't try anything too funny with the source window, this solves 80% of the issue at hand.