Lakshmi:
For the simple case of just capturing a single HTML fragment, I would recommend creating a simple XSD for a generic content item that was defined as a single element of type xs:string (with whatever annotation you want to expose different levels of HTML formatting). This avoid the need for having to create a custom in-line editor, and provides the added value that if you later wanted to extend the schema to capture additional elements (say, metadata), you can just update the schema and start appending new values into your content.
kevin