I am the developer of the MetaForum messageboard software, and recently we ported a small feature of our forum to a Wordpress Plugin: ClickQuote.
ClickQuote lets you or your users easily and quickly quote and reply to any part of a post or comment, as many as you want, all in one post. All you have to do is hover over the paragraph you want to quote, and Click It! And ClickQuote does the rest for you.
Please give it a look at http://www.startup20.com/ClickQuote/