When I have to render textarea content to the front end I usually pass it thru a function that converts newlines to <br/> tags and double newlines signal paragraph tags so blocks of text get surrounded by <p> and </p> tags.

To save time I usually use a ready made PHP function from the wordpress codebase. You can get the link from the man himself: http://ma.tt/scripts/autop/

If you check it out you'll see it does some heavy lifting with about 20 regular expressions.

I know I could use a wysiwyg editor (like TinyMCE or CKEditor) that can format the data on the client and then send it to the server (most of them add <p>..</p> tags by default) but I want to know the experience of others in handling raw textarea input and then displaying it on the front end.