After farting around with this for hours, I've come up with a fix for what is obviously a bug. Hopefully, it will make it's way into the next release.
I have no idea how to get this information to the developers in a proper way so this is my only outlet.
If someone will direct me, I'll post it in the proper place so the developers can be aware...
Rich Text Editor
One can not enter multiple line feeds without having them removed automatically by the RTE. This is bogus. All users (typically end users not familiar with HTML) expect the ability to muck up their page with excessive line feeds as desired and should be allowed to so so. :-)
The fix I've found works but may not be "proper" so the WP team needs to address this formally.
I could not get this to work in 2.1, only in 2.1.1.
I thingk the developers addressed the issue partially by fixing the standard editor but did not address the same problem in the RTE.
In the file wp-includes\js\tinymce\tiny_mce_config.php at line 24
change like so:
$valid_elements = 'p/-div[*],-strong/-b[*],-em/-i[*],-font[*],-ul[*],-ol[*],-li[*],*[*]';
$valid_elements = '#p[*],-div[*],-strong/-b[*],-em/-i[*],-font[*],-ul[*],-ol[*],-li[*],*[*]';