I really like they way that quotes are operated at my forum. It's in a separate box, which you can edit, but it separates it from the post, making it a bit easier to see.
http://s4.invisionfree.com/claninvinc/index.php?act=idxMaybe you could have users toggle this option, because I find it very handy. For multiple quote, just have a tree (like menus, click the arrow, expand the quote)
Perhaps, though, rather than quot being on the bottom, have it above the reply box?