HTML formatting in posts will not work

this is not my night. the first time i posted about this issue, the post is now gone. ??? anyways, let me post this again.

I installed the Alsandros theme tonight and everything seems to work ok EXCEPT for ONE MAJOR THING:

I cannot seem to keep any HTML formatting in my posts whether I use Visual or HTML mode. Any p, h1, h2, etc. tags seem to be removed and everything is thrown together into one P tag. I even defined the p, h1 and h2 tags in style.css and to no avail. When I view the source, everything is thrown into one P tag that’s inside the div with class=”entry”

This also won’t allow me to insert plugins into any pages because like above, it just reads the code as text.

Please help, I have looked through every link in the Dashboard and tried to edit files that the theme allows me to edit and no luck.

(my site is http://seelocalvideo.tv)

Thanks in advance for your insights!