Following up from my original post - I think I finally found the files to hack. The hack I implemented keeps all the XOOPS editor buttons visible if you are logged in as "admin". Otherwise it strips out all the buttons and just displays the textarea box.
 The file 
 {XOOPSBASE}/class/xoopsform/formdhtmltextarea.php  
 affects the News item submission form in the News module, and the Post Comment and Reply forms in the xcGallery module. 
The file 
 {XOOPSBASE}/include/xoopscodes.php  
 affects the Upload Picture form in the xcGallery module and the Post form in the Forum module.
It seems very strange to me that the modules (core and add-on) are not consistent with how they implement the XOOPS default editor. I would think I should have only had to hack one file, and that would be used by all modules.
Here's the hack for function "xoopsCodeTarea" in xoopscodes.php
----------------------------------------------------
 function xoopsCodeTarea($textarea_id, $cols=60, $rows=15, $suffix=null) 
{ 
    $hiddentext = isset($suffix) ? 'xoopsHiddenText'.trim($suffix) : 'xoopsHiddenText'; 
    //Hack for url, email ...., the anchor is for having a link on [_More...] 
         
    //HACK: UNLESS USER IS ADMIN, COMMENT OUT THE SPECIAL XOOPSCODE DHTML BUTTONS BECAUSE MAKES PAGE TOO  
    //   CLUTTERED AND TOO COMPLICATED FOR USERS WHEN ADDING COMMENTS, FORUMS, PICTURES, ETC. (3/13/06 JMS). 
     
    //GET THE USER ID OF THE LOGGED IN USER - ADDED THIS SECTION 3/13/06 JMS. 
    global $xoopsUser; 
    if ($xoopsUser) { 
      //User is logged in, display welcome message 
      $uname = $xoopsUser->getVar('uname'); 
      //$upw = $xoopsUser->getVar('pass'); 
      $uid = $xoopsUser->getVar('uid'); 
    } 
     
    // ADMIN USER ID IS 1.  ADDED THIS USER CHECK IF/ELSE CODE 3/13/06 JMS. 
    if ($uid == 1) { 
             ...the rest of the function code goes here... 
 
    // IF USER IS NOT ADMIN, JUST SHOW TEXT AREA. 
    } else {     
        echo "
n"; 
        //Hack smilies move for bold, italic ... 
        $areacontent = isset( $GLOBALS[$textarea_id] ) ? $GLOBALS[$textarea_id] : ''; 
             
        echo "
n"; 
        //Fin du hack     
    }     
 
}  
Use the same structure for the "render" function in formdhtmltextarea.php - the else code is listed below:
---------------------------------------------------- 
 // IF USER IS NOT ADMIN, JUST SHOW TEXT AREA.     
        } else { 
            $ret = "
n"; 
            $ret .= $this->_renderSmileys(); 
            return $ret;         
        }