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Well try replying to this message and you'll see that several little icons appear that 'add code' - eg if you want to insert a link, an image etc in your post to this forum you click the icon above and it talks you through the code.
WYSIWYG editors not only add the code, but they show exactly what it'll look like at the end (What You See Is What You Get) so it's more like using Word or something - when you click to insert an image the image appears.
Some REALLY good ones like FCKEDITOR even have the full shebang and it looks pretty much identical to using word - visit -http://www.fckeditor.net/ and look at their demos and you'll see what I mean.
In terms of getting the page like the xoops.org page, that's what everyone seems to want, but bizarrely nobody has actually integrated that functionality into a module yet!!! As I said there's a couple of developers who are looking at it - with Smartsection being the most likely to get there first...
It's a bit like the space race, depends who you back really.. ;)