Here are the steps I just took to reproduce the issue.
1. Click the link "add new item."
2. In the Dublin Core field title, add the name "John Doe."
3. Click the use HTMl button.
4. Italicize the name.
5. Click add input.
The text "John Doe" remains, but it is not italicized.
Here is the output of the Omeka system information page.
User
Browser Mozilla/5.0 (Macintosh; Intel Mac OS X 10_7_5) AppleWebKit/537.31 (KHTML, like Gecko) Chrome/26.0.1410.65 Safari/537.31
Role super
System
Omeka 2.0.3
PHP 5.2.17 (cgi)
OS Linux 2.6.18-408.el5.lve0.8.61.1 x86_64
MySQL Server 5.0.96
MySQL Client 5.0.96
PHP Extensions
Regular bcmath, calendar, cgi, ctype, curl, date, dom, eAccelerator, filter, ftp, gd, gettext, hash, iconv, imap, ionCube Loader, json, libxml, mbstring, mcrypt, mysql, mysqli, openssl, pcre, PDO, pdo_mysql, pdo_sqlite, posix, pspell, Reflection, session, SimpleXML, snmp, soap, sockets, SPL, SQLite, standard, suhosin, timezonedb, tokenizer, xml, xmlreader, xmlrpc, xmlwriter, xsl, Zend Optimizer, zip, zlib
Zend the ionCube PHP Loader, Zend Optimizer
Plugins
AddItemLink 0.1
CatalogSearch 0.1
Coins 2.0.1
CsvImport 2.0
EditLink 1.0
Geolocation 2.0 (inactive)
LcSuggest 2.0
SearchByMetadata 1.1
SimplePages 2.0.1
SimpleVocab 2.0
Themes
American Converts 2.0.1 (current)
Berlin 2.0
Seasons 2.1.1
Thanks, Roy 2.0.2