Index: wp-includes/formatting.php
===================================================================
--- wp-includes/formatting.php	(revision 31447)
+++ wp-includes/formatting.php	(working copy)
@@ -378,6 +378,10 @@
 
 	$pee = $pee . "\n"; // just to make things a little easier, pad the end
 
+	/*
+	 * Pre tags shouldn't be touched by autop.
+	 * Replace pre tags with placeholders and bring them back after autop.
+	 */
 	if ( strpos($pee, '<pre') !== false ) {
 		$pee_parts = explode( '</pre>', $pee );
 		$last_pee = array_pop($pee_parts);
@@ -402,62 +406,98 @@
 
 		$pee .= $last_pee;
 	}
+	// Change double <br>s into double breaks, which will turn into paragraphs.
+	$pee = preg_replace('|<br />\s*<br />|', "\n\n", $pee);
 
-	$pee = preg_replace('|<br />\s*<br />|', "\n\n", $pee);
-	// Space things out a little
 	$allblocks = '(?:table|thead|tfoot|caption|col|colgroup|tbody|tr|td|th|div|dl|dd|dt|ul|ol|li|pre|form|map|area|blockquote|address|math|style|p|h[1-6]|hr|fieldset|legend|section|article|aside|hgroup|header|footer|nav|figure|figcaption|details|menu|summary)';
+	// Add a single line break above block-level opening tags.
 	$pee = preg_replace('!(<' . $allblocks . '[^>]*>)!', "\n$1", $pee);
+	// Add a double line break below block-level closing tags.
 	$pee = preg_replace('!(</' . $allblocks . '>)!', "$1\n\n", $pee);
-	$pee = str_replace(array("\r\n", "\r"), "\n", $pee); // cross-platform newlines
+	// Standardize newline characters to "\n".
+	$pee = str_replace(array("\r\n", "\r"), "\n", $pee); 
 
+	// Collapse line breaks before and after <option> elements so they don't get autop'd.
 	if ( strpos( $pee, '<option' ) !== false ) {
-		// no P/BR around option
 		$pee = preg_replace( '|\s*<option|', '<option', $pee );
 		$pee = preg_replace( '|</option>\s*|', '</option>', $pee );
 	}
 
+	/*
+	 * Collapse line breaks inside <object> elements, and before <param> and <embed> elements
+	 * so they don't get autop'd.
+	 */
 	if ( strpos( $pee, '</object>' ) !== false ) {
-		// no P/BR around param and embed
 		$pee = preg_replace( '|(<object[^>]*>)\s*|', '$1', $pee );
 		$pee = preg_replace( '|\s*</object>|', '</object>', $pee );
 		$pee = preg_replace( '%\s*(</?(?:param|embed)[^>]*>)\s*%', '$1', $pee );
 	}
 
+	/*
+	 * Collapse line breaks inside <audio> and <video> elements.
+	 * Collapse line breaks before and after <source> and <track> elements.
+	*/
 	if ( strpos( $pee, '<source' ) !== false || strpos( $pee, '<track' ) !== false ) {
-		// no P/BR around source and track
 		$pee = preg_replace( '%([<\[](?:audio|video)[^>\]]*[>\]])\s*%', '$1', $pee );
 		$pee = preg_replace( '%\s*([<\[]/(?:audio|video)[>\]])%', '$1', $pee );
 		$pee = preg_replace( '%\s*(<(?:source|track)[^>]*>)\s*%', '$1', $pee );
 	}
 
-	$pee = preg_replace("/\n\n+/", "\n\n", $pee); // take care of duplicates
-	// make paragraphs, including one at the end
+	// Remove duplicate, contiguous double-line breaks.
+	$pee = preg_replace("/\n\n+/", "\n\n", $pee);
+	
+	// Split up the contents into an array of bits, separated by double line breaks.
 	$pees = preg_split('/\n\s*\n/', $pee, -1, PREG_SPLIT_NO_EMPTY);
+
 	$pee = '';
-
+	// Rebuild the content as a string, wrapping every bit with a <p>.
 	foreach ( $pees as $tinkle ) {
 		$pee .= '<p>' . trim($tinkle, "\n") . "</p>\n";
 	}
 
-	$pee = preg_replace('|<p>\s*</p>|', '', $pee); // under certain strange conditions it could create a P of entirely whitespace
+	// Under certain strange conditions it could create a P of entirely whitespace.
+	$pee = preg_replace('|<p>\s*</p>|', '', $pee); 
+	
+	/*
+	 * If a closing <div>, <address>, or <form> tag is on a line with preceding
+	 * text that doesn't include another tag, wrap the preceding text with a <p>.
+	 */
 	$pee = preg_replace('!<p>([^<]+)</(div|address|form)>!', "<p>$1</p></$2>", $pee);
-	$pee = preg_replace('!<p>\s*(</?' . $allblocks . '[^>]*>)\s*</p>!', "$1", $pee); // don't pee all over a tag
-	$pee = preg_replace("|<p>(<li.+?)</p>|", "$1", $pee); // problem with nested lists
+	
+	// If an opening or closing block element tag is wrapped in a <p>, unwrap it.
+	$pee = preg_replace('!<p>\s*(</?' . $allblocks . '[^>]*>)\s*</p>!', "$1", $pee); 
+	
+	// Problem with nested lists, which is probably taken care of the preceding preg_replace().
+	$pee = preg_replace("|<p>(<li.+?)</p>|", "$1", $pee); 
+	
+	// If a <blockquote> is wrapped with a <p>, move it inside the <blockquote>.
 	$pee = preg_replace('|<p><blockquote([^>]*)>|i', "<blockquote$1><p>", $pee);
 	$pee = str_replace('</blockquote></p>', '</p></blockquote>', $pee);
+	
+	// If an opening or closing block element tag is preceded by an opening <p> tag, remove it.
 	$pee = preg_replace('!<p>\s*(</?' . $allblocks . '[^>]*>)!', "$1", $pee);
+	
+	// If an opening or closing block element tag is followed by a closing <p> tag, remove it.
 	$pee = preg_replace('!(</?' . $allblocks . '[^>]*>)\s*</p>!', "$1", $pee);
 
+	// Optionally insert line breaks.
 	if ( $br ) {
+		// Replace newlines that shouldn't be touched with a placeholder.
 		$pee = preg_replace_callback('/<(script|style).*?<\/\\1>/s', '_autop_newline_preservation_helper', $pee);
-		$pee = preg_replace('|(?<!<br />)\s*\n|', "<br />\n", $pee); // optionally make line breaks
+		// Replace any new line characters that aren't preceded by a <br /> with a <br />.
+		$pee = preg_replace('|(?<!<br />)\s*\n|', "<br />\n", $pee); 
+		// Replace newline placeholders with newlines.
 		$pee = str_replace('<WPPreserveNewline />', "\n", $pee);
 	}
 
+	// If a <br /> tag is after an opening or closing block tag, remove it.
 	$pee = preg_replace('!(</?' . $allblocks . '[^>]*>)\s*<br />!', "$1", $pee);
+	
+	// If a <br /> tag is before a subset of opening or closing block tags, remove it.
 	$pee = preg_replace('!<br />(\s*</?(?:p|li|div|dl|dd|dt|th|pre|td|ul|ol)[^>]*>)!', '$1', $pee);
 	$pee = preg_replace( "|\n</p>$|", '</p>', $pee );
 
+	// Replace placeholder <pre> tags with their original content.
 	if ( !empty($pre_tags) )
 		$pee = str_replace(array_keys($pre_tags), array_values($pre_tags), $pee);