I wanted the toolbar to only show when the mouse is over the editor, so I did this:

<script language="javascript" type="text/javascript" >
   function ToolbarHide(editorId, toolbarId, action) {
      var t = document.getElementById(toolbarId);
      var e = document.getElementById(editorId);
      var h = e.getAttribute(action + "Height");
      if (action == "Hide") {
         t.style.visibility = "collapse";
         t.style.display = "none";
         e.style.height = h;
      }
      else {
         t.style.visibility = "visible";
         t.style.display = "block";
         e.style.height = h;
      }
   }
</script>

The editor has custom attributes, which I calculated based on the height of the toolbar:
<ighedit:WebHtmlEditor ID="WebHtmlEditor" runat="server" Width="965px" Height="241px" ShowHeight="195px" HideHeight="241px"

In the code behind, I then set it up like this:
we.Attributes.Add("onMouseOver", "ToolbarHide('" + we.ClientID + "', '" + we.Toolbar.ClientID + "', 'Show');");
we.Attributes.Add("onMouseLeave", "ToolbarHide('" + we.ClientID + "', '" + we.Toolbar.ClientID + "', 'Hide');");
we.Toolbar.Style.Add("visibility", "collapse");
we.Toolbar.Style.Add("display", "none");

Hi Brett,

The latest version of WebHtmlEditor has extra logic which adjusts height of editor to match with height value set in server.
It used to be that height was applied only to the outer html element (TABLE) and child elements related to editing area had height attributes equals to 100%. There was no adjustments on client and under IE that triggered overall height of editor equals to custom height plus height of toolbar and footer.
In order to fix that, the WebHtmlEditor now generates on client approximate percentage heights of editing area (DIV) and one of its parent (TD). On client, javascript codes check instant offsets, calculate required heights and adjust heights of those DIV and TD to exact values, which allow to produce overall value of height defined by server.
When toolbar is hidden on client (unexpected and not supported action), then in old version the height attributes of child elements used to be static (100%) and therefore they did not interact with that action. However, I guess that under IE the overall height of WebHtmlEditor with hidden toolbar was probably reduced by the height of toolbar.

Currently the heights of html elements under IE are adjusted within the member method _ie. That action is performed only once (_htSet flag) and it adjusts heights of 2 html elements which have ids: ID+"_td_" and actual editing area.

The best I can suggest to you, is to try use that internal method. To trigger that more than once the _htSet flag should be reset. And in order to restore original height after hide-show, original/old height of _td) element should be restored to its original value. Below is example for you.

function HideToolBar(objName, objNameHidden) {
  var editor = iged_getById(objName);
  if (editor._tb.style.display == "none")
    return;
  editor._tb.style.display = "none";
  if (editor._ie) {
    var td = document.getElementById(editor.ID + "_td_");
    editor._old_td_height = td.height;
    delete editor._htSet;
    editor._ie(2);
  }
  oFormObject = document.forms[0];
  //oFormObject.elements[objNameHidden].value = 0;
  return false;
}

function ShowToolBar(objName, objNameHidden) {
  var editor = iged_getById(objName);
  if (editor._tb.style.display == "block")
    return;
  editor._tb.style.display = "block";
  if (editor._ie) {
    var td = document.getElementById(editor.ID + "_td_");
    td.height = editor._old_td_height;
    delete editor._htSet;
    editor._ie(2);
  }
  oFormObject = document.forms[0];
  //oFormObject.elements[objNameHidden].value = 1;
  return false;
}