Similar to this issue... http://forums.pligg.com/questions-co...mb-module.html

If you are having trouble with the Story Preview where any 'n' character is being stripped in the preview window and looking like a carriage return...

Try editing the submit_step_2.tpl file in the wistie template folder. Near the bottom of this file look for the following line of code

$('#lp-bodytext').html($('#lp-bodytext').html().replace(/n/g,'<br />'));

and replace it with

$('#lp-bodytext').html($('#lp-bodytext').html().replace(/\n/g,'<br />'));


This fixed the issue for me.