I've spent most of today messing around seeing how well I could use HTML in a forum script instead of BBCode. What I've done is code an option to have HTML or not. Once I switch from plain text I can use Smilies and (at the moment) all HTML. In most cases this will probably be alright, but I am looking at which tags will be disallowed.
Code still has to be entities, so will have to find a way to isolate the code tags so that only entities can be used inside of them.
To this point I've saved myself a lot of translating BBCode into HTML so it will print to the files.
What about a WYSIWYG?
The thread files are plain text with special tags and are treated as plain text. A linebreak is a linebreak, not lines with a br or p tags. A WYSIWYG would make a right royal mess of things (plus be larger in size than the rest of the whole board software).