acts_as_textiled missing something, possibly config?

I've got acts_as_textiled working on my Mac,no problems. Same install process on RedHat FC8, is acting weird.

For example:

1.) Already inplace HTML tags are not translated. An <H1> appears as <H1>. However any new 'h1.' works fine 2.) putting in href substitues get blownout into some weird representation. a "<a href="/lists">Listings</a>" which I want to get translated as "Listings":/lists actually gets translated to "&#x000A;<p>&quot;Listings&quot;:/lists<br />

Have I missed something, somewheres? RedCloth is 3.0.4 and 4.1.1, acts_as_textiled I got from github (git clone...)

I've also tried various browsers (lynx, opera, firefox, etc.), same result.