Why does my text look like this?

Just today I noticed when I create a new text document in Scrivener, the text looks like this. I’ve tried playing with formatting, but I don’t know what’s causing it. I’ve tried more than one project and they all outlined the text like this. Does anyone know what’s causing this?
Screen shot 2011-01-14 at 9.22.36 AM.png

Preserve Formatting is turned on. You can turn it off by selecting the text and choosing Format>Formatting>Preserve Formatting, but if it’s occurring on all new documents you create it sounds like your default settings got goofed up. To fix it select some normal text in the editor that’s formatted the way you’d like your default to look, then go to Scrivener>Preferences:Formatting and select “use current” up in the top right.