Having problems with the editor

Hi there guys and girls,

I am having a bit of a scruffle with my visual editor. The problem is that it does not publish the HTML code that has been written in the editor. So if you have text, that does get published, but as soon as you put line breaks or other html code it does not show up on the front end of the website.
Even worse when you look at the code by going to view source code, the HTML that has been entered turns into closed /p tags.

So the HTML codes in the editor do not transfer correctly across, but I have checked the links and other stuff in the database and they do appear correctly.

What could be the problem?