Clients found and I have confirmed that embedding a file inline using IE8 frequently results in a failure to embed and at times also destroys (draft version only) all XML content.

Note that our the tests where done in table cells which may contribute to the issue. It seemed to me that first hitting backspace in IE8 inside a table cell removed the paragraph tag which may also be a factor.

I tested and confirmed this using the latest stable-5.5 (master branch) at commit 8a2b3fbfd83115e04b0a985f4add288cd3a98cf1

Steps to reproduce

1. In IE8 edit content with a table
2. Click an empty cell (removing the space in the cell (removed paragraph tag) is also worth testing)
3. Click paperclip icon
4. In the popup window use the 'browse' function to locate a file (it seemed to also make a difference at times if we used search or browse, browse seemed less reliable) and select a file.
5. Now click the 'embed-inline' checkbox
6. At this point the following things might occur;
a) it worked as expected (rarely)
b) we were no not able to click 'Ok' or 'Cancel' but had to click the 'x' to force the popup window closure
c) upon clicking 'Ok' all XML content is removed forcing the client to discard the draft
d) sometimes a b + c are both experienced.

I also tested in IE9 and FF13 and both worked fine.