1) Copy the magnoliaStandard.js from the mgnl-resources/fckeditor/custom/config and init directories and place in same directories in /docroot
2) Edit the config/magnoliaStandard.js and add FCKConfig.EnterMode = 'br'; FCKConfig.ShiftEnterMode = 'p';
3) Change the jsConfigFile and jsInitFile to point to the files in the /docroot directory for the samples-editor/tabContent/content control
4) Add a few lines of text (pressing the Enter key to create multiple lines) and highlight some or all of the lines
5) Click on the "Insert/Remove Bulleted List" button

In Firefox this works as expected, it creates a bullet list out of the highlighted items. In IE it treats all of the text in the editor (even unhighlighted text) as one single bullet.

I downloaded the 2.4.3 version from the fckeditor.net site and confirmed that the problem is in FCKEditor, not anything to do with Magnolia. Performing the same customization to the latest version of FCKEditor (2.6.2) doesn't create the same problem. The bug was fixed somewhere between 2.4.3 and 2.6.2 in their codebase.