One more data point. This happens with TextEdit, but not with Appleworks (for me). So it may be something in the TextEdit calling syntax. (Or, Appleworks uses a different service)
It looks like this may be a 64bit issue. My G5 exhibits the same problem but not the G4 (dual).
It is annoying. But not critical.
What concerns me is the "Not Responding" message and the fact that you have to do a Force Quit.