The data is stored in CRM / SQL with a \r\n, but of course an HTML web control will not interpret those correctly. I believe CRM uses an RTF control to interpret them correctly, depending on the entity.
In your web app, try doing this:
xxxx.replace("\r\n", "<br />")
If you want to write it back to CRM from your web app, you will need to reverse this.
Note: It might just be a \r or just a \n and not both, so modify the replace statement appropriately, I am writing this up from memory. :)