Re: line break
Textareas are one of the few places where those characters will work as expected. It's perfectly valid to have them in a JavaScript string variable/object, but because all contiguous whitespace is treated as a single space character throughout most of HTML, you usually don't run across the tab and newline characters in production code. They are useful, though, in textarea and pre elements (and the now-deprecated pre equivalents, like code, tt, and so on) as well as in JavaScript alert boxes (alert, confirm, input).
As for the SiteBuilder question -- I never touch those things, so I don't know. HTML is a WYSIWYM (what you see is what you mean) markup language; WYSIWYG (what you see is what you get) leaves meaning out of the equation, and leads to inaccessible sites by default. And as far as I'm concerned, if Jaws can't make sense of it, and you can't "view" the site properly on a Braille terminal, that's a failure.
“Beware of bugs in the above code; I have only proved it correct, not tried it.” --Donald Knuth
"It was as if its architects were given a perfectly good hammer and gleefully replied, 'neat! With this hammer, we can build a tool that can pound in nails.'" -- Alex Papadimoulis (on TheDailyWTF.com)