_why turned off hard breaks by default in the latest version of RedCloth. The option you want is :hard_breaks, but it is broken. There was a fix applied to the trunk (http://code.whytheluckystiff.net/redcloth/changeset/128) seven months ago, but _why hasn't released it as a gem. I've bugged him to do so, but it would help if you all would too. To fix it yourself, either unpack RedCloth r128 or later into vendor/ and require it from there or else open the class and overwrite the hard_break method.
class RedCloth hard_break( text ) text.gsub!( /(.)\n(?!\n|\Z| *([#*=]+(\s|$)|[{|]))/, "\\1<br />" ) if hard_breaks end end
Jason
