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The formatting should be fixed now - the text was added to an HTML form and as such became packed text - I see that this may be an issue if a large formatted message is used and have changed the code to make it HTML itself and it will now maintain the formatting.
Your comment "new users don't even see the workspace unless they go and change All My Workspaces!" is not quite correct as they will all have been sent a Welcome to the Workspace email and if they click on the Workspace name in the email they will be taken directly to the Workspace Overview page.
Phil, thanks for fixing/improving. As per the workspace being visible, if users go directly to .../teamcollab then they won't see the workspace. I added those instructions after receiving many complaints from new users. What I'll do though is add a link directly to the workspace in the email, which now that is formatted could be more readable.