This seems to a kind of head scratching experience not only for Drupal but also for WordPress, or anywhere you are using any kind of html editor.
I’m using fckeditor with Drupal and faced this problem.
The line break doesn’t work and whole text formatting disappears in the page.
However I couldn’t find an ultimate solution but I got it working.
First thing you need to do is make sure that you are using full HTML Mode
Admin->Adminster->Site configuration and select Full HTML
Next make sure that you are editing the page contents from Admin side and not from the front side as Admin user.
Check admin/content/node in your URL to make sure that you are in Admin while editing contents.
It works for me 🙂
Also just realized that while editing a page make sure that you have selected FULL HTML under Input Format.