It seems like this might be a compatibility issue with the ADDT server behavior you are using. The only reference to the custom folder should be in the declaration of the HTML Editor instance on the page. Here is one of mine for example:
<?php
// WebAssist iRite: Rich Text Editor for Dreamweaver
$WARichTextEditor_1 = CreateRichTextEditor ("update", "HTMLEditor/", "100%", "200px", "Default", "../custom/update_update1.js", "".$row_Recordset1['the_value'] ."");
?>
The file in the custom folder that is referenced should be the one listed here, it is a js file that should be named after the instance of HTML Editor on the page. There should not be any reference to an xml file listed here, just the js files.
As a test of this you can try applying the HTML Editor to a new blank page so that it is the only thing on the page, then upload and test the page. The editor should work fine in this scenario and you should be able to see the difference in the reference to the js file.
