Those powerblogs users who use the optional formatting option "Format HTML automagically" know that the magic involved was not very powerful magic — it broke and left a post unformatted often enough to be annoying. I've been working on the second generation of auto-formatter which will be far smarter and more robust, but in the mean time on Eugene Volokh's suggestion I implemented a stop-gap which will add paragraph tags to everything separated by newlines. It's not ideal, of course, but it should really ameliorate the automagic formatter's failures. (Of course, this problem doesn't affect you if you're using the default "break at newlines" option.)
I also introduced a minor feature in the editing window which can take ascii-formatted tabular data and put all of the appropriate HTML code around it to make it an HTML table. (One can then select the newly generated table and edit it with the table editor.)