No modifications to work with CSRF protection were applied to the in_place_editing plugin, as a result it doesn't work at all with CSRF protection turned on.
Also, scriptaculous/prototype have moved away from the evalScripts option for Ajax.Request, the option is now htmlResponse (htmlResponse should be the opposite of the old evalScripts). As a result at the moment for some requests the RJS does not get evaluated and instead is inserted into the page as escaped text.
Attached is a patch that fixes both these issues in the plugin, including additional tests.
Also changed: added the :text_between_controls option available in modern scriptaculous, for rendering things like <input type="submit" value="Save"/> or <a href="whatever">cancel</a>.