Daedalus touch is the first app I've found that's truly designed for the writer. Congrats Soulmen. It's a joy to work with.

I'd love to see Markdown support. For professional writers, it's continues to grow as the writing format for Web work and would really round out the function of DT.

Actually I think it could easily be integrated so that non-Markdown users wouldn't be inconvenienced with extra keys or menus. Almost all the Markdown-capable apps for iPad also have TextExpander, so most of us seem to be using TE to add Markdown tags. I'm thinking that a choice in the browser bookmark list to Preview Markdown as HTML, a Convert Markdown option under the Export menu (that converts Markdown to HTML and copies it to the clipboard) and an Email Markdown option under the Export menu (that creates an HTML email) would suffice for most Markdown users.

Since raw HTML tags also pass through Markdown, this would also add the capability of HTML editing to Daedalus touch. Users could preview and quickly export HTML, but it wouldn't get in the way of basic function for those using DT for plain text.

Glad to hear. I have switched over to Daedalus touch for most of my writing, including markdown. I'm currently hobbling together a markdown preview via txt doc export to QuickTumblr. It will be nice to have preview at the touch of a button (or maybe a two fingered flick since you guys have been so clever with the touch controls.)

Markdown is currently supported for export to PDF and ePub. However, exporting with Markdown cannot handle images since Daedalus is a plain text editor only.

But this brings me to a problem I am having. When I export my files to PDF, the Markdown code is not converted at all; it is just a plain text PDF with all the code elements still there. Is something broken or am I doing something wrong?

PDF export with Markdown should work just fine. Open a sheet or stack, go to Export, tap "PDF…" and make sure to set the style to "Markdown". Also, make sure that you don't indent your paragraphs since Markdown interprets this as code blocks and doesn't parse Markdown tags inside these blocks.