diff --git a/docs/client/api.html b/docs/client/api.html
index 7e4b19b8f5..05b44533ab 100644
--- a/docs/client/api.html
+++ b/docs/client/api.html
@@ -1,5 +1,5 @@
 <template name="api">
-{{#better_markdown}}
+{{#markdown}}
 
 <h1 id="api">The Meteor API</h1>
 
@@ -1097,31 +1097,31 @@ applicable. If you only need to receive the fields that changed, see
 <dt><span class="name">added(document)</span> <span class="or">or</span></dt>
 <dt><span class="name">addedAt(document, atIndex, before)</span></dt>
 <dd>
-{{#better_markdown}}
+{{#markdown}}
 A new document `document` entered the result set. The new document
 appears at position `atIndex`. It is immediately before the document
 whose `_id` is `before`. `before` will be `null` if the new document
 is at the end of the results.
-{{/better_markdown}}
+{{/markdown}}
 </dd>
 
 <dt><span class="name">changed(newDocument, oldDocument)
     <span class="or">or</span></span></dt>
 <dt><span class="name">changedAt(newDocument, oldDocument, atIndex)</span></dt>
 <dd>
-{{#better_markdown}}
+{{#markdown}}
 The contents of a document were previously `oldDocument` and are now
 `newDocument`. The position of the changed document is `atIndex`.
-{{/better_markdown}}
+{{/markdown}}
 </dd>
 
 <dt><span class="name">removed(oldDocument)</span>
   <span class="or">or</span></dt>
 <dt><span class="name">removedAt(oldDocument, atIndex)</span></dt>
 <dd>
-{{#better_markdown}}
+{{#markdown}}
 The document `oldDocument` is no longer in the result set. It used to be at position `atIndex`.
-{{/better_markdown}}
+{{/markdown}}
 </dd>
 
 {{#dtdd "movedTo(document, fromIndex, toIndex, before)"}}
@@ -1162,12 +1162,12 @@ result set, not the entire contents of the document that changed.
   <span class="or">or</span></dt>
 <dt><span class="name">addedBefore(id, fields, before)</span></dt>
 <dd>
-{{#better_markdown}}
+{{#markdown}}
 A new document entered the result set. It has the `id` and `fields`
 specified. `fields` contains all fields of the document excluding the
 `_id` field. The new document is before the document identified by
 `before`, or at the end if `before` is `null`.
-{{/better_markdown}}
+{{/markdown}}
 </dd>
 
 {{#dtdd "changed(id, fields)"}}
@@ -3003,11 +3003,11 @@ by spammers.)
                 'Hello from Meteor!',
                 'This is a test of Email.send.');
 
-{{/better_markdown}}
+{{/markdown}}
 
 <h2 id="assets"><span>Assets</span></h2>
 
-{{#better_markdown}}
+{{#markdown}}
 `Assets` allows server code in a Meteor application to access static server
 assets, which are located in the `private` subdirectory of an application's
 tree.
@@ -3021,7 +3021,7 @@ directory called `nested` with a file called `data.txt` inside it, then server
 code can read `data.txt` by running:
 
     var data = Assets.getText('nested/data.txt');
-{{/better_markdown}}
+{{/markdown}}
 
 </template>
 
@@ -3040,7 +3040,7 @@ code can read `data.txt` by running:
 </h3>
 
 <div class="desc">
-{{#each descr}}{{#better_markdown}}{{{this}}}{{/better_markdown}}{{/each}}
+{{#each descr}}{{#markdown}}{{{this}}}{{/markdown}}{{/each}}
 </div>
 
 {{#if args}}
@@ -3054,7 +3054,7 @@ code can read `data.txt` by running:
 {{/if}}
 
 {{#if content}}
-{{#better_markdown}}{{> content}}{{/better_markdown}}
+{{#markdown}}{{> content}}{{/markdown}}
 {{/if}}
 
 </div>
@@ -3074,7 +3074,7 @@ code can read `data.txt` by running:
       {{{type}}}
     {{/if}}
   </span></dt>
-<dd>{{#better_markdown}}{{{descr}}}{{/better_markdown}}</dd>
+<dd>{{#markdown}}{{{descr}}}{{/markdown}}</dd>
 {{/each}}
 </dl>
 </template>
diff --git a/docs/client/commandline.html b/docs/client/commandline.html
index e14a342b9d..fb642598e6 100644
--- a/docs/client/commandline.html
+++ b/docs/client/commandline.html
@@ -1,6 +1,6 @@
 <template name="commandline">
 <div>
-{{#better_markdown}}
+{{#markdown}}
 
 {{#api_section "commandline"}}Command line{{/api_section}}
 
@@ -188,6 +188,6 @@ instead of deploying to Meteor's servers.  You will have to deal with
 logging, monitoring, backups, load-balancing, etc, all of which we
 handle for you if you use `meteor deploy`.
 
-{{/better_markdown}}
+{{/markdown}}
 </div>
 </template>
diff --git a/docs/client/concepts.html b/docs/client/concepts.html
index 4dde25943c..b76bfebe8d 100644
--- a/docs/client/concepts.html
+++ b/docs/client/concepts.html
@@ -21,7 +21,7 @@ when writing those apps.
 
 <template name="whatismeteor">
 
-{{#better_markdown}}
+{{#markdown}}
 
 <h2 id="whatismeteor">What is Meteor?</h2>
 
@@ -69,11 +69,11 @@ In Meteor 1.0, the `meteor` build tool will have full support for
 Atmosphere.
 {{/note}}
 
-{{/better_markdown}}
+{{/markdown}}
 </template>
 
 <template name="structure">
-{{#better_markdown}}
+{{#markdown}}
 
 <h2 id="structuringyourapp">Structuring your application</h2>
 
@@ -170,11 +170,11 @@ These rules stack, so that within `lib`, for example, files are still
 loaded in alphabetical order; and if there are multiple files named
 `main.js`, the ones in subdirectories are loaded earlier.
 
-{{/better_markdown}}
+{{/markdown}}
 </template>
 
 <template name="data">
-{{#better_markdown}}
+{{#markdown}}
 
 <h2 id="dataandsecurity">Data and security</h2>
 
@@ -350,11 +350,11 @@ and publish functions validate all of their arguments. Just run
 method or publish function which skips `check`ing any of its arguments will fail
 with an exception.
 
-{{/better_markdown}}
+{{/markdown}}
 </template>
 
 <template name="reactivity">
-{{#better_markdown}}
+{{#markdown}}
 
 <h2 id="reactivity">Reactivity</h2>
 
@@ -417,11 +417,11 @@ Meteor's
 is a package called [`Deps`](#deps) that is fairly short and straightforward.
 You can use it yourself to implement new reactive data sources.
 
-{{/better_markdown}}
+{{/markdown}}
 </template>
 
 <template name="livehtml">
-{{#better_markdown}}
+{{#markdown}}
 
 <h2 id="livehtml">Live HTML</h2>
 
@@ -488,11 +488,11 @@ preserve these elements even when their enclosing template is
 rerendered, but will still update their children and copy over any
 attribute changes.
 
-{{/better_markdown}}
+{{/markdown}}
 </template>
 
 <template name="templates">
-{{#better_markdown}}
+{{#markdown}}
 
 <h2 id="templates">Templates</h2>
 
@@ -640,11 +640,11 @@ discussion.
     > Session.set("weather", "cool and dry");
     In DOM:  <div>It'll be cool and dry tonight</div>
 
-{{/better_markdown}}
+{{/markdown}}
 </template>
 
 <template name="packages_concept">
-{{#better_markdown}}
+{{#markdown}}
 
   <h2 id="usingpackages">Using packages</h2>
 
@@ -681,12 +681,12 @@ are willing to brave the fact that the Meteor package format is not
 documented yet and will change significantly before Meteor 1.0. See
 [Writing Packages](#writingpackages).
 
-{{/better_markdown}}
+{{/markdown}}
 </template>
 
 
 <template name="namespacing">
-{{#better_markdown}}
+{{#markdown}}
 
   <h2 id="namespacing">Namespacing</h2>
 
@@ -775,12 +775,12 @@ certainly shouldn't depend on this quirk, and in the future Meteor may
 check for it and throw an error if you do.
 {{/note}}
 
-{{/better_markdown}}
+{{/markdown}}
 </template>
 
 
 <template name="deploying">
-{{#better_markdown}}
+{{#markdown}}
 
 <h2 id="deploying">Deploying</h2>
 
@@ -846,12 +846,12 @@ have `npm` available, and run the following:
     $ npm install fibers@1.0.1
 {{/warning}}
 
-{{/better_markdown}}
+{{/markdown}}
 </template>
 
 
 <template name="packages_writing">
-{{#better_markdown}}
+{{#markdown}}
 
   <h2 id="writingpackages">Writing packages</h2>
 
@@ -950,5 +950,5 @@ quick tips:
   machine architecture, but if not your built Meteor package will be
   portable.
 
-{{/better_markdown}}
+{{/markdown}}
 </template>
diff --git a/docs/client/docs.html b/docs/client/docs.html
index eed9a7dfc3..33f870b00f 100644
--- a/docs/client/docs.html
+++ b/docs/client/docs.html
@@ -22,10 +22,6 @@
   </div>
 </body>
 
-<template name="better_markdown">
-  {{> content}}
-</template>
-
 <template name="nav">
   <div id="nav-inner">
     {{#each sections}}
@@ -74,20 +70,20 @@
   <dt><span class="name">{{{name}}}</span>
     {{#if type}}<span class="type">{{type}}</span>{{/if}}
   </dt>
-  <dd>{{#better_markdown}}{{> content}}{{/better_markdown}}</dd>
+  <dd>{{#markdown}}{{> content}}{{/markdown}}</dd>
 </template>
 
 
 
 <template name="warning">
   <div class="warning">
-    {{#better_markdown}}{{> content}}{{/better_markdown}}
+    {{#markdown}}{{> content}}{{/markdown}}
   </div>
 </template>
 
 <template name="note">
   <div class="note">
-    {{#better_markdown}}{{> content}}{{/better_markdown}}
+    {{> content}}
   </div>
 </template>
 
diff --git a/docs/client/introduction.html b/docs/client/introduction.html
index 93ef7e6917..7783fe4024 100644
--- a/docs/client/introduction.html
+++ b/docs/client/introduction.html
@@ -4,7 +4,7 @@
 not here -->
 <!-- XXX by: (three headshot thumbnails w names) -->
 
-{{#better_markdown}}
+{{#markdown}}
 
 <b>_Meteor is an ultra-simple environment for building modern websites.
 What once took weeks, even with the best tools, now takes hours with
@@ -132,6 +132,6 @@ with the project!
 <dd>The core code is on <a href="http://github.com/meteor/meteor">GitHub</a>.  If you're able to write code or file issues, we'd love to have your help.  Please read <a href="https://github.com/meteor/meteor/wiki/Contributing-to-Meteor">Contributing to Meteor</a> for how to get started.
 </dl>
 
-{{/better_markdown}}
+{{/markdown}}
 </div>
 </template>
diff --git a/docs/client/packages.html b/docs/client/packages.html
index 077e4f1cd1..e1b79538e7 100644
--- a/docs/client/packages.html
+++ b/docs/client/packages.html
@@ -1,5 +1,5 @@
 <template name="packages">
-{{#better_markdown}}
+{{#markdown}}
 
 <h1 id="packages">Packages</h1>
 
@@ -34,5 +34,5 @@ and removed with:
 {{> pkg_showdown}}
 {{> pkg_underscore}}
 
-{{/better_markdown}}
+{{/markdown}}
 </template>
diff --git a/docs/client/packages/accounts-ui.html b/docs/client/packages/accounts-ui.html
index 6d48560dc7..c2db87b180 100644
--- a/docs/client/packages/accounts-ui.html
+++ b/docs/client/packages/accounts-ui.html
@@ -1,5 +1,5 @@
 <template name="pkg_accounts_ui">
-{{#better_markdown}}
+{{#markdown}}
 ## `accounts-ui`
 
 A turn-key user interface for Meteor Accounts.
@@ -29,5 +29,5 @@ when the URLs are loaded.
 
 
 
-{{/better_markdown}}
+{{/markdown}}
 </template>
diff --git a/docs/client/packages/amplify.html b/docs/client/packages/amplify.html
index 38c50e6cf4..9e6e414c7c 100644
--- a/docs/client/packages/amplify.html
+++ b/docs/client/packages/amplify.html
@@ -1,5 +1,5 @@
 <template name="pkg_amplify">
-{{#better_markdown}}
+{{#markdown}}
 
 ## `amplify`
 
@@ -10,5 +10,5 @@ components, and several useful utility functions.
 Amplify defines a global namespace `amplify` on the client only. It does
 not run on the server.
 
-{{/better_markdown}}
+{{/markdown}}
 </template>
diff --git a/docs/client/packages/appcache.html b/docs/client/packages/appcache.html
index 4f2885b189..35fdf3b7aa 100644
--- a/docs/client/packages/appcache.html
+++ b/docs/client/packages/appcache.html
@@ -1,5 +1,5 @@
 <template name="pkg_appcache">
-{{#better_markdown}}
+{{#markdown}}
 
 ## `appcache`
 
@@ -89,5 +89,5 @@ cache, see the
 [AppCache page](https://github.com/meteor/meteor/wiki/AppCache)
 in the Meteor wiki.
 
-{{/better_markdown}}
+{{/markdown}}
 </template>
diff --git a/docs/client/packages/audit-argument-checks.html b/docs/client/packages/audit-argument-checks.html
index d2b311d927..d07d8e971d 100644
--- a/docs/client/packages/audit-argument-checks.html
+++ b/docs/client/packages/audit-argument-checks.html
@@ -1,5 +1,5 @@
 <template name="pkg_audit_argument_checks">
-{{#better_markdown}}
+{{#markdown}}
 
 ## `audit-argument-checks`
 
@@ -14,5 +14,5 @@ Methods and publish functions that do not need to validate their arguments can
 simply run `check(arguments, [Match.Any])` to satisfy the
 `audit-argument-checks` coverage checker.
 
-{{/better_markdown}}
+{{/markdown}}
 </template>
diff --git a/docs/client/packages/backbone.html b/docs/client/packages/backbone.html
index ab9d2d74d0..52397a2808 100644
--- a/docs/client/packages/backbone.html
+++ b/docs/client/packages/backbone.html
@@ -1,5 +1,5 @@
 <template name="pkg_backbone">
-{{#better_markdown}}
+{{#markdown}}
 ## `backbone`
 
 [Backbone](http://documentcloud.github.com/backbone/) is a popular client-side MVC framework for managing complex
@@ -7,5 +7,5 @@ data in the browser. In addition to the MVC and DOM-binding
 functionality, it also provides an API for HTML5 pushState and
 client-side URL routing.
 
-{{/better_markdown}}
+{{/markdown}}
 </template>
diff --git a/docs/client/packages/bootstrap.html b/docs/client/packages/bootstrap.html
index 9a017829a3..1d813fdbdb 100644
--- a/docs/client/packages/bootstrap.html
+++ b/docs/client/packages/bootstrap.html
@@ -1,5 +1,5 @@
 <template name="pkg_bootstrap">
-{{#better_markdown}}
+{{#markdown}}
 ## `bootstrap`
 
 [Twitter's Bootstrap](http://twitter.github.com/bootstrap/) package is a front-end toolkit for faster, more
@@ -9,5 +9,5 @@ interactions including typography, forms, buttons, tables, grids, and
 navigation.
 
 
-{{/better_markdown}}
+{{/markdown}}
 </template>
diff --git a/docs/client/packages/browser-policy.html b/docs/client/packages/browser-policy.html
index cc46e01f3a..2b5f8c2358 100644
--- a/docs/client/packages/browser-policy.html
+++ b/docs/client/packages/browser-policy.html
@@ -1,5 +1,5 @@
 <template name="pkg_browser_policy">
-{{#better_markdown}}
+{{#markdown}}
 ## `browser-policy`
 
 The `browser-policy` package lets you set security-related policies that will be
@@ -161,5 +161,5 @@ allows images to have their `src` attributes point to images served from
 and WebSocket connections to `https://example.com`.
 
 
-{{/better_markdown}}
+{{/markdown}}
 </template>
diff --git a/docs/client/packages/coffeescript.html b/docs/client/packages/coffeescript.html
index d01284cf4f..8e8fcc3038 100644
--- a/docs/client/packages/coffeescript.html
+++ b/docs/client/packages/coffeescript.html
@@ -1,5 +1,5 @@
 <template name="pkg_coffeescript">
-{{#better_markdown}}
+{{#markdown}}
 ## `coffeescript`
 
 [CoffeeScript](http://coffeescript.org/) is a little language that
@@ -48,5 +48,5 @@ Heavy CoffeeScript users, please let us know how this arrangement
 works for you, whether `share` is helpful for you, and anything else
 you'd like to see changed.
 
-{{/better_markdown}}
+{{/markdown}}
 </template>
diff --git a/docs/client/packages/d3.html b/docs/client/packages/d3.html
index f361fa27c8..ca999a697d 100644
--- a/docs/client/packages/d3.html
+++ b/docs/client/packages/d3.html
@@ -1,5 +1,5 @@
 <template name="pkg_d3">
-{{#better_markdown}}
+{{#markdown}}
 
 ## `d3`
 
@@ -13,5 +13,5 @@ to DOM manipulation.
 The `d3` package adds the D3 library to the client JavaScript
 bundle. It has no effect on the server.
 
-{{/better_markdown}}
+{{/markdown}}
 </template>
diff --git a/docs/client/packages/force-ssl.html b/docs/client/packages/force-ssl.html
index 07e4bb09eb..e5c96df358 100644
--- a/docs/client/packages/force-ssl.html
+++ b/docs/client/packages/force-ssl.html
@@ -1,5 +1,5 @@
 <template name="pkg_force_ssl">
-{{#better_markdown}}
+{{#markdown}}
 ## `force-ssl`
 
 This package causes Meteor to redirect insecure connections (HTTP) to a
@@ -19,5 +19,5 @@ Applications deployed to `meteor.com` subdomains with
 `meteor deploy` are automatically served via HTTPS using Meteor's
 certificate.
 
-{{/better_markdown}}
+{{/markdown}}
 </template>
diff --git a/docs/client/packages/jquery.html b/docs/client/packages/jquery.html
index b7998a3155..37958d9b23 100644
--- a/docs/client/packages/jquery.html
+++ b/docs/client/packages/jquery.html
@@ -1,5 +1,5 @@
 <template name="pkg_jquery">
-{{#better_markdown}}
+{{#markdown}}
 
 ## `jquery`
 
@@ -17,5 +17,5 @@ plugins as separate packages. These include:
 * [`jquery-layout`](http://layout.jquery-dev.net/)
 * [`jquery-waypoints`](http://imakewebthings.com/jquery-waypoints/)
 
-{{/better_markdown}}
+{{/markdown}}
 </template>
diff --git a/docs/client/packages/less.html b/docs/client/packages/less.html
index da5145b03d..9067515a39 100644
--- a/docs/client/packages/less.html
+++ b/docs/client/packages/less.html
@@ -1,5 +1,5 @@
 <template name="pkg_less">
-{{#better_markdown}}
+{{#markdown}}
 ## `less`
 
 [LESS](http://lesscss.org/) extends CSS with dynamic behavior such as variables, mixins,
@@ -15,5 +15,5 @@ If you want to `@import` a file, give it the extension `.lessimport`
 to prevent Meteor from processing it independently.
 {{/note}}
 
-{{/better_markdown}}
+{{/markdown}}
 </template>
diff --git a/docs/client/packages/random.html b/docs/client/packages/random.html
index 72c7ce9f51..a9684035f4 100644
--- a/docs/client/packages/random.html
+++ b/docs/client/packages/random.html
@@ -1,5 +1,5 @@
 <template name="pkg_random">
-{{#better_markdown}}
+{{#markdown}}
 ## `random`
 
 The `random` package provides several functions for generating random
@@ -28,5 +28,5 @@ Returns a random string of `n` hexadecimal digits.
 {{/dtdd}}
 </dl>
 
-{{/better_markdown}}
+{{/markdown}}
 </template>
diff --git a/docs/client/packages/spiderable.html b/docs/client/packages/spiderable.html
index 3bd785c4d4..9afade0eac 100644
--- a/docs/client/packages/spiderable.html
+++ b/docs/client/packages/spiderable.html
@@ -1,5 +1,5 @@
 <template name="pkg_spiderable">
-{{#better_markdown}}
+{{#markdown}}
 ## `spiderable`
 
 
@@ -34,5 +34,5 @@ If you deploy your application with `meteor bundle`, you must install
 {{/warning}}
 
 
-{{/better_markdown}}
+{{/markdown}}
 </template>
diff --git a/docs/client/packages/stylus.html b/docs/client/packages/stylus.html
index 7d3a217028..ed68a146b6 100644
--- a/docs/client/packages/stylus.html
+++ b/docs/client/packages/stylus.html
@@ -1,5 +1,5 @@
 <template name="pkg_stylus">
-{{#better_markdown}}
+{{#markdown}}
 ## `stylus`
 
 [Stylus](http://learnboost.github.com/stylus/) is a CSS pre-processor with a simple syntax and expressive
@@ -16,5 +16,5 @@ your `.styl` files to enable cross-browser mixins such as
 
 See <http://visionmedia.github.com/nib> for documentation of the nib extensions of Stylus.
 
-{{/better_markdown}}
+{{/markdown}}
 </template>
diff --git a/docs/client/packages/underscore.html b/docs/client/packages/underscore.html
index bad129e09d..7302679937 100644
--- a/docs/client/packages/underscore.html
+++ b/docs/client/packages/underscore.html
@@ -1,5 +1,5 @@
 <template name="pkg_underscore">
-{{#better_markdown}}
+{{#markdown}}
 ## `underscore`
 
 [Underscore](http://underscorejs.org/) is a utility-belt library for 
@@ -19,5 +19,5 @@ package as we will remove the default underscore in the future.
 {{/warning}}
 
 
-{{/better_markdown}}
+{{/markdown}}
 </template>
diff --git a/packages/htmljs/tohtml.js b/packages/htmljs/tohtml.js
index 28fc0a9e3c..b238994d9d 100644
--- a/packages/htmljs/tohtml.js
+++ b/packages/htmljs/tohtml.js
@@ -132,6 +132,18 @@ HTML.toText = function (node, textMode, parentComponent) {
 
 };
 
+HTML.Raw.prototype.toText = function () {
+  return this.value;
+};
+
+// used when including templates within {{#markdown}}
+HTML.Tag.prototype.toText = function (textMode) {
+  if (textMode === HTML.TEXTMODE.STRING)
+    return this.toHTML();
+  else
+    throw new Error("Can't insert tags in attributes or TEXTAREA elements");
+};
+
 HTML.CharRef.prototype.toText = function (textMode) {
   if (textMode === HTML.TEXTMODE.STRING)
     return this.str;
diff --git a/packages/showdown/template-integration.js b/packages/showdown/template-integration.js
index d5fcd5713e..b4bef234c0 100644
--- a/packages/showdown/template-integration.js
+++ b/packages/showdown/template-integration.js
@@ -4,7 +4,7 @@ if (Package.ui) {
   Package.ui.Handlebars.registerHelper('markdown', UI.block(function () {
     var self = this;
     return function () {
-      var text = UI.toRawText(self.__content);
+      var text = UI.toRawText(self.__content, self /*parentComponent*/);
       var converter = new Showdown.converter();
       return HTML.Raw(converter.makeHtml(text));
     };
diff --git a/packages/spacebars-tests/template_tests.html b/packages/spacebars-tests/template_tests.html
index a9507f0bc3..a13b336e4d 100644
--- a/packages/spacebars-tests/template_tests.html
+++ b/packages/spacebars-tests/template_tests.html
@@ -288,7 +288,8 @@
 </template>
 
 <template name="spacebars_template_test_markdown_basic">
-  {{#markdown}}
+  {{#with obj}}
+    {{#markdown}}
 {{hi}}
 /each}}
 
@@ -301,20 +302,28 @@
 * <b>{{hi}}</b>
 * <b>/each}}</b>
 
+some paragraph to fix showdown's four space parsing below.
+
     {{hi}}
     /each}}
 
     <b>{{hi}}</b>
-    <b>/each</b>
+    <b>/each}}</b>
 
 &gt
+
 * &gt
+
 `&gt`
+
     &gt
 
 &gt;
+
 * &gt;
+
 `&gt;`
+
     &gt;
 
 `{{hi}}`
@@ -323,19 +332,29 @@
 `<b>{{hi}}</b>`
 `<b>/each}}`
 
-  {{/markdown}}
+    {{/markdown}}
+  {{/with}}
 </template>
 
 <template name="spacebars_template_test_markdown_if">
   {{#markdown}}
 
 {{#if cond}}true{{else}}false{{/if}}
+
 <b>{{#if cond}}true{{else}}false{{/if}}</b>
+
 * {{#if cond}}true{{else}}false{{/if}}
+
 * <b>{{#if cond}}true{{else}}false{{/if}}</b>
+
+some paragraph to fix showdown's four space parsing below.
+
     {{#if cond}}true{{else}}false{{/if}}
+
     <b>{{#if cond}}true{{else}}false{{/if}}</b>
+
 `{{#if cond}}true{{else}}false{{/if}}`
+
 `<b>{{#if cond}}true{{else}}false{{/if}}</b>`
 
   {{/markdown}}
@@ -345,12 +364,21 @@
   {{#markdown}}
 
 {{#each seq}}{{.}}{{/each}}
+
 <b>{{#each seq}}{{.}}{{/each}}</b>
+
 * {{#each seq}}{{.}}{{/each}}
+
 * <b>{{#each seq}}{{.}}{{/each}}</b>
+
+some paragraph to fix showdown's four space parsing below.
+
     {{#each seq}}{{.}}{{/each}}
+
     <b>{{#each seq}}{{.}}{{/each}}</b>
+
 `{{#each seq}}{{.}}{{/each}}`
+
 `<b>{{#each seq}}{{.}}{{/each}}</b>`
 
   {{/markdown}}
@@ -363,7 +391,7 @@
 </template>
 
 <template name="spacebars_template_test_markdown_inclusion_subtmpl">
-  Nothing in particular
+  <span>Nothing in particular</span>
 </template>
 
 <template name="spacebars_template_test_markdown_block_helpers">
diff --git a/packages/spacebars-tests/template_tests.js b/packages/spacebars-tests/template_tests.js
index ec0bd8f157..ad7897b0d5 100644
--- a/packages/spacebars-tests/template_tests.js
+++ b/packages/spacebars-tests/template_tests.js
@@ -946,16 +946,76 @@ Tinytest.add('spacebars - templates - constant #each argument', function (test)
 // @returns {String} simplified html content
 var divContentForMarkdown = function (div) {
   return trim(stripComments(div.innerHTML))
-        .replace(/\<br\>/g, '\n');
+        .replace(/\<br\>/g, '\n')
+        .replace(/<(\/?\S+)>/g, function (s) { return s.toLowerCase(); }); // for IE
+};
+
+// extract a multi-line string from a comment within a function.
+// @param f {Function} eg function () { /* [[[...content...]]] */ }
+// @returns {String} eg "content"
+var textFromFunction = function(f) {
+  return f.toString().match(/\[\[\[([\S\s]*)\]\]\]/m)[1]
+    .replace(/[ ]*\/\/ \d+$/gm, ''); // remove line number comments
 };
 
 Tinytest.add('spacebars - templates - #markdown - basic', function (test) {
   var tmpl = Template.spacebars_template_test_markdown_basic;
+  tmpl.obj = {snippet: "<i>hi</i>"};
   tmpl.hi = function () {
-    return "<i>hi</i>";
+    return this.snippet;
   };
   var div = renderToDiv(tmpl);
-  test.equal(divContentForMarkdown(div), "FIXME");
+  test.equal(divContentForMarkdown(div), textFromFunction(function () { /*
+[[[<p><i>hi</i>
+/each}}</p>
+
+<p><b><i>hi</i></b>
+<b>/each}}</b></p>
+
+<ul>
+<li><i>hi</i></li>
+<li><p>/each}}</p></li>
+<li><p><b><i>hi</i></b></p></li>
+<li><b>/each}}</b></li>
+</ul>
+
+<p>some paragraph to fix showdown's four space parsing below.</p>
+
+<pre><code>&lt;i&gt;hi&lt;/i&gt;
+/each}}
+
+&lt;b&gt;&lt;i&gt;hi&lt;/i&gt;&lt;/b&gt;
+&lt;b&gt;/each}}&lt;/b&gt;
+</code></pre>
+
+<p>&amp;gt</p>
+
+<ul>
+<li>&amp;gt</li>
+</ul>
+
+<p><code>&amp;gt</code></p>
+
+<pre><code>&amp;gt
+</code></pre>
+
+<p>&gt;</p>
+
+<ul>
+<li>&gt;</li>
+</ul>
+
+<p><code>&amp;gt;</code></p>
+
+<pre><code>&amp;gt;
+</code></pre>
+
+<p><code>&lt;i&gt;hi&lt;/i&gt;</code>
+<code>/each}}</code></p>
+
+<p><code>&lt;b&gt;&lt;i&gt;hi&lt;/i&gt;&lt;/b&gt;</code>
+<code>&lt;b&gt;/each}}</code></p>]]] */
+  }));
 });
 
 Tinytest.add('spacebars - templates - #markdown - if', function (test) {
@@ -964,10 +1024,50 @@ Tinytest.add('spacebars - templates - #markdown - if', function (test) {
   tmpl.cond = function () { return R.get(); };
 
   var div = renderToDiv(tmpl);
-  test.equal(divContentForMarkdown(div), "FIXME(false)");
+  test.equal(divContentForMarkdown(div), textFromFunction(function () { /*
+[[[<p>false</p>
+
+<p><b>false</b></p>
+
+<ul>
+<li><p>false</p></li>
+<li><p><b>false</b></p></li>
+</ul>
+
+<p>some paragraph to fix showdown's four space parsing below.</p>
+
+<pre><code>false
+
+&lt;b&gt;false&lt;/b&gt;
+</code></pre>
+
+<p><code>false</code></p>
+
+<p><code>&lt;b&gt;false&lt;/b&gt;</code></p>]]] */
+  }));
   R.set(true);
   Deps.flush();
-  test.equal(divContentForMarkdown(div), "FIXME(true)");
+  test.equal(divContentForMarkdown(div), textFromFunction(function () { /*
+[[[<p>true</p>
+
+<p><b>true</b></p>
+
+<ul>
+<li><p>true</p></li>
+<li><p><b>true</b></p></li>
+</ul>
+
+<p>some paragraph to fix showdown's four space parsing below.</p>
+
+<pre><code>true
+
+&lt;b&gt;true&lt;/b&gt;
+</code></pre>
+
+<p><code>true</code></p>
+
+<p><code>&lt;b&gt;true&lt;/b&gt;</code></p>]]] */
+  }));
 });
 
 Tinytest.add('spacebars - templates - #markdown - each', function (test) {
@@ -976,16 +1076,53 @@ Tinytest.add('spacebars - templates - #markdown - each', function (test) {
   tmpl.seq = function () { return R.get(); };
 
   var div = renderToDiv(tmpl);
-  test.equal(divContentForMarkdown(div), "FIXME([])");
+  test.equal(divContentForMarkdown(div), textFromFunction(function () { /*
+[[[<p><b></b></p>
+
+<ul>
+<li></li>
+<li><b></b></li>
+</ul>
+
+<p>some paragraph to fix showdown's four space parsing below.</p>
+
+<pre><code>&lt;b&gt;&lt;/b&gt;
+</code></pre>
+
+<p>``</p>
+
+<p><code>&lt;b&gt;&lt;/b&gt;</code></p>]]] */
+    }));
+
   R.set(["item"]);
   Deps.flush();
-  test.equal(divContentForMarkdown(div), "FIXME([\"item\"])");
+  test.equal(divContentForMarkdown(div), textFromFunction(function () { /*
+[[[<p>item</p>
+
+<p><b>item</b></p>
+
+<ul>
+<li><p>item</p></li>
+<li><p><b>item</b></p></li>
+</ul>
+
+<p>some paragraph to fix showdown's four space parsing below.</p>
+
+<pre><code>item
+
+&lt;b&gt;item&lt;/b&gt;
+</code></pre>
+
+<p><code>item</code></p>
+
+<p><code>&lt;b&gt;item&lt;/b&gt;</code></p>]]] */
+    }));
 });
 
 Tinytest.add('spacebars - templates - #markdown - inclusion', function (test) {
   var tmpl = Template.spacebars_template_test_markdown_inclusion;
   var div = renderToDiv(tmpl);
-  test.equal(divContentForMarkdown(div), "<p>Nothing in particular</p>");
+  test.equal(divContentForMarkdown(div), "<p><span>Nothing in particular</span></p>");
 });
 
 Tinytest.add('spacebars - templates - #markdown - block helpers', function (test) {
diff --git a/packages/ui/components.js b/packages/ui/components.js
index ac42dc35ac..9ffff780e9 100644
--- a/packages/ui/components.js
+++ b/packages/ui/components.js
@@ -12,7 +12,7 @@ UI.If = Component.extend({
     // of a Component during init (but presumably not before
     // or after)?
   },
-  render: function (buf) {
+  render: function () {
     var self = this;
     return function () {
       var condition = getCondition(self);
@@ -54,7 +54,7 @@ UI.Unless = Component.extend({
     this.condition = this.data;
     this.data = undefined;
   },
-  render: function (buf) {
+  render: function () {
     var self = this;
     return function () {
       var condition = getCondition(self);
@@ -68,7 +68,7 @@ UI.With = Component.extend({
   init: function () {
     this.condition = this.data;
   },
-  render: function (buf) {
+  render: function () {
     var self = this;
     return function () {
       var condition = getCondition(self);