Thanks, Brian. I've been looking at the Outgoing Mail options on the Tools menu & couldn't find the reply options settings you're referencing. It took me a while to realize that I had to actually reply to a message to see the Reply Options. Now things are working the way I want.

Prefix senders text with > stopped working. I have no idea what happened. It is checked as on in the setup formatting panel. Any idea what I'm missing? 

If the message you are replying to is an HTML only message (no plain text part) then any reply where the option to preserve HTML formatting is enabled will not get the ">" line prefixes.  Disable the preserve original formatting setting if you want the ">" prefix.

I have the opposite problem. I have left unchecked the checkbox for "For replies, use message reader quotijng styles in the editor." Yet, I still get the ">"

Pay attention to this setting In the reply options:  Prefix included text from the original with ">" markers