I am using WikiEditor 0.3.1 in my mediawiki (1.19.2) installation and found that for some weird reason, undo/redo (Ctrl+Z and Ctrl+Shift+Z) doesn't work in the editor with Chrome, Chromium and Firefox browsers; while it works for Rekonq and default KDE webbrowser.
I found T33780 - a slightly different but probably relevant bug report.
Also, undo works just fine in default VisualEditor in Chrome.
Interesting point to notice is that Undo/Redo work fine even on WikiEditor used on Wikipedia, but not in my mediawiki instance, looks like some good changes not pushed to upstream yet.
I also tried test2.wikipedia.org, it works fine there as well.