[eluser]dansmith65[/eluser]
I had this problem the other day too. I was using a view for the message, so the line breaks should have been coming from the line breaks in my view.
Turns out I had to set this config option: mailtype = text
The user guide says text is the default, but a text email wouldn't work for me unless I specifically set that option.
(using CI 2.0.0)