A coworker has the same issue. When he sends to another colleague that uses the command line mail app in Linux, the Linux user only sees one long line for each paragraph.
To (sort of) fix this in Snow Leopard, we created an Automator service that takes highlighted text, runs the Unix command line "fmt" command, and replaces the text with the wrapped text.
To do the same, start Automator and select the Service template. The first line has:
Service receives selected "text" in "any application"
Leave the first item as "text" and either leave "any application" or change it to "Mail.app".
Make sure Replaces selected text is highlighted.
Next, click on the Utilities icon under Actions. Drag the "Run Shell Script" icon to the right pane. Replace "cat" with "fmt -s -70" to wrap lines at 70 characters and collapse whitespace (multiple spaces, tabs) into a single space. If you do not want to collapse the spaces, leave out the "-s". Use Save as to name the new service.
Open System Preferences, select Keyboard and then Keyboard Shortcuts. Click on Services. Scroll down and find your new service. Click on the + at the bottom of the window. Select Application and choose Mail or all applications. Give it a name (I reused the same name as the service) and a shortcut.
To use it, highlight the text and press the keyboard shortcut. The text should reappear wrapped at 70 characters. If you edit some more and the lines no longer wrap correctly, just run it again.
Scott