The initial <p></p> tags that surround the entered text are not set in the formatting of the iRite instance. This is a setting in the WA_iRite > fckconfig.js file. In this file look for this near line 117:
FCKConfig.EnterMode = 'p' ; // p | div | br
change this to br like this:
FCKConfig.EnterMode = 'br' ; // p | div | br
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