I do not recall correctly, but there was some setting which converts an <enter> into a new line with <p> tag. I guess there has been upgrade in tinymce too, you should check the release notes as well as the moxiecode website.
i did changed the values also as show below...forced_root_block : ' ',force_p_newlines : 0,i cleared the cache too.. Still i am getting same problem.Thanks in advance.