zope.schema has Text and TextLine. The former is for multiline text, the latter is for a single line, as the name suggests. Zope 3 forms will use a text area for Text fields and an input box for TextLine fields. Display widgets, however, apply no special formatting (other than HTML-quoting of characters like <, > and &), and since newlines are treated the same way as spaces in HTML, your multiline text gets collapsed into a single paragraph.

Here's a pattern I've been using in Zope 3 to display multiline user-entered text as several paragraphs:

import cgi

from zope.component import adapts
from zope.publisher.browser import BrowserView
from zope.publisher.interfaces import IRequest


class SplitToParagraphsView(BrowserView):
    """Splits a string into paragraphs via newlines."""

    adapts(None, IRequest)

    def paragraphs(self):
        if self.context is None:
            return []
        return filter(None, [s.strip() for s in self.context.splitlines()])

    def __call__(self):
        return "".join('<p>%s</p>\n' % cgi.escape(p)
                        for p in self.paragraphs())

View registration

<configure
    xmlns="http://namespaces.zope.org/zope">

  <view
      for="*"
      name="paragraphs"
      type="zope.publisher.interfaces.browser.IBrowserRequest"
      factory=".views.SplitToParagraphsView"
      permission="zope.Public"
      />

</configure>

and usage

<p tal:replace="structure object/attribute/@@paragraphs" />

Update: The view really ought to be registered twice: once for basestring and once for NoneType. I was too lazy to figure out the dotted names for those (or check if zope.interface has external interface declarations for them), so I registered it for "*". You should know that this makes the view available for arbitrary objects (but won't work for most of them, since they don't have a splitlines method), and that it is, sadly, accessible to users who may try to hack your system by typing things like @@paragraphs in the browser's address bar. Ignas Mikalajūnas offers an alternative solution using TALES path adapters.