HTML Editor version 12.8
I am slowly getting familiar with the new version of the Editor.
The control of the cursor is baffling me. Using the keyboard cursor keys is totally different. I cannot move the cursor character by character and it's driving me crazy.

How and where do I change the cursor control settings?

It works fine here with the keyboard arrow keys. (Win7/64). In the Editor it is not actually the cursor you move, but the insertion mark. Moving the just the cursor makes no sence and has no relevance.
When a web page is opened, the insertion mark is top left by default, before the doctype. You can move it using the arrow keys, as long as there are some text or tags to move along. After the last character on the page you need to use the enter key to get to the next line.

Working ok for me in Win7.

Keith