Index: wp-includes/formatting.php
===================================================================
--- wp-includes/formatting.php	(revision 7272)
+++ wp-includes/formatting.php	(working copy)
@@ -64,8 +64,6 @@
 	$pee = preg_replace('|<br />\s*<br />|', "\n\n", $pee);
 	// Space things out a little
 	$allblocks = '(?:table|thead|tfoot|caption|colgroup|tbody|tr|td|th|div|dl|dd|dt|ul|ol|li|pre|select|form|map|area|blockquote|address|math|style|input|p|h[1-6]|hr)';
-	$pee = preg_replace('!(<' . $allblocks . '[^>]*>)!', "\n$1", $pee);
-	$pee = preg_replace('!(</' . $allblocks . '>)!', "$1\n\n", $pee);
 	$pee = str_replace(array("\r\n", "\r"), "\n", $pee); // cross-platform newlines
 	if ( strpos($pee, '<object') !== false ) {
 		$pee = preg_replace('|\s*<param([^>]*)>\s*|', "<param$1>", $pee); // no pee inside object/embed
@@ -73,6 +71,8 @@
 	}
 	$pee = preg_replace("/\n\n+/", "\n\n", $pee); // take care of duplicates
 	$pee = preg_replace('/\n?(.+?)(?:\n\s*\n|\z)/s', "<p>$1</p>\n", $pee); // make paragraphs, including one at the end
+	$pee = preg_replace('!(<' . $allblocks . '[^>]*>)!', "\n$1",$pee);
+	$pee = preg_replace('!(</' . $allblocks . '>)!',"$1\n\n", $pee);
 	$pee = preg_replace('|<p>\s*?</p>|', '', $pee); // under certain strange conditions it could create a P of entirely whitespace
 	$pee = preg_replace('!<p>([^<]+)\s*?(</(?:div|address|form)[^>]*>)!', "<p>$1</p>$2", $pee);
 	$pee = preg_replace( '|<p>|', "$1<p>", $pee );