In my Rails 3 application I use textarea to let users to write a new message in a forum.
textarea
However, when the message is displayed, all newlines look like spac
You'll need to convert the plain text of the textarea to HTML.
At the most basic level you could run a string replacement:
message_content.gsub! /\n/, ''
You could also use a special format like Markdown (Ruby library: BlueCloth) or Textile (Ruby library: RedCloth).