When you're editing cards that are RichText - the default type - then just above the text box you'll see a section containing buttons and a menu for formatting the text. It looks like this:

Going from left to right...

The style menu lets you make the current selection into a header or subheader. (If you have four or more in the whole card, a table of contents will automatically be created.)

The big B and I will make any text you have selected bold or italic, respectively (and of course you can use both).

The next two icons format the selected text as lists. The first one creates lists:

1. that
2. are
3. numbered (if you look closely at the icon you can see little numbers).

The second one creates:

• plain
• bullet point
• lists.

The next two icons indent and outdent text. If you use this on text in lists,

1. you
2. can
3. get
   1. nested
   2. lists.

Next is the icon is for creating links, see linking.

What remains are two radio buttons which let you go back and forth between normal mode (Wysiwyg, which stands for what you see is what you get), and HTML, which lets you look at and edit raw HTML. Note: as of Wagn 0.9.2, you cannot save while in HTML mode. Simply switch back to Wysiwyg mode and then click Save. This is a known bug we are working on.

In RichText and PlainText, to separate paragraphs just put two returns/enters.