are added by RTE3

This shouldn't be a problem, it could be a problem with the code in the page you are submitting to.

Also make sure you are in WYSIWYG mode before submitting.

No one else has reported this and in tests I have not come across this problem.

As the actual HTML produced is handled by a built in API in Mozilla, rather than any javascript code in the RTE, the only thing I can think of suggesting is to try and reinstalling Mozilla on your machine

Borg,
I've got an example of a similar problem in a post here
http://forums.webwiz.net/forum_posts.asp?TID=13814

If you look at the 6th post down, there's a line around the end of the first quote area that should read "<h3>Left Side Column Stuff</h3>" except there's some mangled nbsp characters in front of it that were placed there by the rte.

If I edit the post, the mangling changes but the basic nbsp stuff is still there.
The more frequently I edit it, the more it gets mangled.

Happens in both IE and FF. There were no &nbsp; in the initial data that I pasted in from notepad.