I just threw the switch to enable Wiki Formatted Text in CAREO, specifically in learning resource descriptions (any time you see a resource listed - search results, main page, whatever), and discussion post entries. This will let folks just go ahead and enter plain text, and CAREO will try to Do The Right Thing to display it as nice HTML.
Something like this discussion on "Earth At Night" looks a wee bit better now that it's not all munged into one paragraph per entry, or faking formatting using the icky
I'm using the RADEOX RE java rendering engine. Looks like it's doing a decent job, but it appears to require double carriage returns before it will paragraphize some text, whereas most folks will use a single return to break up a long block of text. I'll look into changing this behaviour.