Quoting jonshapiro
I'm a little confused. Do you mean just put space between lines and then press enter?
No, after you hit enter, press the space bar (so type a blank space on each new blank line), hit enter + space, hit enter + space etc. One enter + space for every blank line you want.
Regarding the wrapping text around only some photos, I still need more information. Will it be all thumbnail sized images, or could it sometimes be thumbnails and sometimes full size images (text won't really wrap nicely around those mind you as they're probably too wide, but just checking).
Getting some images to float and others not to, requires a little hacking. Basically you need to use some code that you don't use much otherwise, I'll stick with the underline button, like Sander explains here and here (this does nearly what you want, but not quite - captions can now be done differently than explained here).
Basically, what you do is every image you want to float to the left (ie, the text wraps around it on the right) you surround in [u][/u]. So if I wanted to float this photo to the left in a blog entry, I'd end up with the following:
[u][img=http://photos.travellerspoint.com/4/1_1253559606608_with eunice.jpg][/u]
The easiest way to get this is to highlight the img code and then click the U button above the entry.
That in itself won't do anything though, until you customize the design of your blog to take this into account. To do that, click on the TEMPLATE tab in your blog management area. Choose the sub tab 'Edit your Template' and paste in this:
u img.photo {float:left;margin:0 5px 0 0;padding:0;}
Save template, and refresh the blog entry to see it in action. One thing to note is that the text that comes after the photo is what gets stuck on the right of the photo.
Here's an example with one photo not floated, whilst the other is.