Please correct me if I'm wrong, but today Lokalize became the first open source tool to support XLIFF inline markup editing.
I tried the latest svn trunk revision of virtaal, but it didn't display markup and mangled my test XLIFF file. AFAIK inline markup editing in proprietary world is only supported by Java Heartsome l10n Suite.
But this of course would mean nothing w/o Translate-Toolkit's (same laboratory as Virtaal's) odf2xliff converter, which will be integrated into Localize thanks to KDE's kross technology ;)
My plans also include support for inserting markuped text from other entries and translation memory (Lokalize will have to match tag id's for that).