Perhaps I misunderstand, but it sounds like you want a wysiwyg editor. I'd say that's more client side than server side.
A few links to client side wysiwyg editors.
htmlArea - v2 is IE only. v3 was going to be IE/Mozilla, but was discontinued.
Xinha - A fork of the v3 release candidate code of htmlArea.
TinyMCE - IE/Mozilla compatible.
FCKeditor - IE/Mozilla compatible in v2 (currently in rc stage).