Looks like you're right about the i/b/u/s options. Definitely needs a few more (link for one), but looks like a cool start at least. I like that it's client-side and works with a simple Backbone.sync back end.
Take a local checkout of https://github.com/bergie/hallo and try the example there. You'll have a lot more formatting options.
We will have a hack weekend on Create in January in Zurich, and hopefully after that I'll update the demo setup with a lot more features enabled (formatting, images, workflows, etc)