Paragraph problem

So, when writing a post in wordpress I can format the text in the visual editor and always see the changes in the HTML-editor (header gets h1, adress gets <adress> etcetera) EXCEPT when using the “paragraph”-format. Which is a problem since this page has one part where my friend should be able to use paragraphs and hopefully without using any kind of html-tags.

As an example I’ll use the contact-part of the page (text on the right should be two paragraphs):
http://karinhoffner.se/blog.php/?page_id=34

php-code:

<?php
/*
Template Name: Kontakt
*/
?>

<?php get_header(); ?>

	 <!-- ******* BODY ******* -->
	 <div id="bd">
            <div id="yui-main">
               <div class="yui-b">

		  <!-- *** OM MIG *** -->
                  <div class="yui-gf">
                     <div class="yui-u first">
                     <?php
                     $post_id = 40;
                     $queried_post = get_post($post_id);
                     ?>
                     <h2>Kontakt</h2>
                     </div>
                     <div class="yui-u">

                        <p>
                        <?php echo $queried_post->post_content; ?>
		        </p>

		     </div>
		  </div>

               </div>
            </div>
         </div>
<?php get_footer(); ?>

CSS-link:
http://karinhoffner.se/wp-content/themes/phpcv/style.css