The alignment icons in the WordPress editor are for aligning text; they are not for aligning images. http://en.support.wordpress.com/visual-editor/#alignment They are used to achieve wrapping text around images on either the right or left hand side, or to display an image that's centered without text on either side of it. If the text beside the images does not occupy the same amount of space that the image beside it does then the text wrapping will continue and the images and text that follow will have a staggered appearance.
Align-left means position left, with the rest of the content wrapping around the right side of the image.
Align-right means position right, with the rest of the content wrapping around the left side of the image.
Align-center means position center, with no wrap-around (= the rest of the content below the image).
Every theme has a maximum displayed image width http://wpbtips.wordpress.com/2009/07/23/maximum-image-width/ so it's important to keep that in mind when posting multiple images side-by-side. If you want two images to be side by side on the same line start by setting the alignment of both images to left. To prevent the staggered effect what you do is insert the following snippet of code into the HTML editor after each image/text pair:
<br style="clear:both;" />
re: Formatting won't work
Blog editors and word processors are not the same and do not work the same way. The web standard is one blank line only, so you cannot add more blank lines by pressing return repeatedly like you would do with a typewriter or in a word processing application. If you want to learn yow to format and space your posts and pages see:
If you are working in the Visual editor, to get single spacing between paragraphs hold the SHIFT key down and simultaneously click ENTER at the end of the paragraph.
If you are working in the HTML (Text) editor, a single click of ENTER will give you a single-spaced line, and two clicks of ENTER will result in double spaced lines. http://onecoolsitebloggingtips.com/2011/09/13/wordpress-formatting-and-spacing/