If what you say is true about PPDs then I have yet another reason to avoid Snow Leopard. I already have plenty of reasons to stay on Tiger and not use Leopard. I can add this as another strike against an Intel Mac and SL.
In any case, Quark tech support took the easy way out (they always do, they want to "solve" your problem and move on quickly) by giving you directions on Exporting to PDF/PS versus what you were trying to do (old school). Exporting to PDF/PS uses the JAWS engine. JAWS is a third party PDF engine that Quark has licensed so that XPress can export PDF/PS files versus printing to a PS. You're asked to choose an output stye because XPress wants to know what settings to export your PDF/PS file at (some settings actually affect the PS file, such as using AsIs to pass spot color through).
Your end result is different because the original PS file is JAWS created. For me, I don't trust this just yet. The system was horrible in v6.x, but has gotten better. However, I still see things that for our workflow just don't cut it. So, I still print to PS and Distill.
As to posting and line breaks. These forums are NOT Safari friendly. Consequently, if you want line breaks you will need to do one of two things. Either use a different browser or use HTML coding for paragraph breaks between paras. The coding for that would be "<p>"