Allowing Returns in Textarea

All,
I have a textarea and I want it to be like this one where when I hit enter it saves the spaces. Do I need to have a RTE or can I do something with my standard form textarea to allow it? I also use the following code to post it:

$story = mysql_real_escape_string(stripslashes($_POST['story']));


Thanks in advance.

If I do need to use an RTE, does anyone have any recommendations on a good one to use?

Thanks.

The "spaces" are saved.

http://www.php.net/nl2br