How about, instead of the blue bar that signifies "insert a new cell",
we have a bar that is divided into sections:
|---insert code---|----insert text-----|----join cells -----|
with the actual text in a small enough fontsize that it doesn't change
the height of the bar when it appears.
I don't know a way to have a "split cells" link here. That might
deserve a menu option in a "Cell" menu or something. Or we could have a
small set of buttons that appears above the top right corner of a cell
(like minimize/maximize buttons in windows or something) when the cell
has focus. Clicking the "split" button splits the cell at the current
cursor position. Something like:
|-split-|-delete-|
--------------------------------------------------
| Cell contents |
--------------------------------------------------
These links would only appear when the cell has focus. Again, I think
it is important that whenever something appears, it not change the
heights of things (so there is no vertical shifting as things appear and
disappear).
Jason