muff - We use a similar blockquoting style. The hang-up is that you can only have one background image per element (and we use two quotes ... one at the beginning and one at the end).

Hence:

XHTML

<blockquote><div><p>First para of quote</p>
<p>Second para of quote</p>
</div></blockquote>

The BLOCKQUOTE gets the upper-left quote image, the DIV the lower-right.

The mistake we made, was not assigning a class-name for this behavior, which means if a commentor adds a single BLOCKQUOTE tag, it gets a bit of funky styling. :(

I'd recommend <blockquote class="unique_name"><div>, then your CSS won't wanker-up blockquotes that your visitors might add.

CSS 

blockquote.unique_name { background:url(upper-left-quote.png) no-repeat; }
blockquote.unique_name div { background:url(lower-right-quote.png) no-repeat; }

;)

Hope this helps.

-stk

( PS - Not sure how semantically correct a blockquote is inside a blockquote? :p Maybe it's just a quote of a quote? :D )

PPS - Once you've picked your XHTML, just modify the quicktoolbar plugin, so that hititng "blockquote" spits out the proper XTHML each time.