HELP: Why line breaks are removed when creating a message in Outlook.

There is a known issue in Outlook 2002, 2003 and 2007 with line breaks being removed. You can find full details about the issue and also the resolution in the link below.  

We recommend you follow the Microsoft instructions in Method 1 as discussed in the Workaround section:

Line breaks are removed in posts made in plain text format in Outlook