Posting seems to be a real coin toss lately. I've had FF (Mac and Windows) and IE both suffer stripped paragraph breaks only to - as quisitio points out - have it not strip them the next time. I edit a published post and the paragraph breaks stay, then I edit it again and they are stripped out.
This is complete madness. On one of my blogs I've been using the Ecto offline editor, but on the other one I've been using the wordpress editor and I think I'm now going to switch to Ecto on everything since I'm getting tired of fighting with the paragraph breaks in the wordpress editor.
It just ain't worth the grief.