If you are using the file upload method, you need to be uploading a file in .txt format only. It should have all the proper container tags as well. I will also add that certain emoticons, such as <3, can cause the text following that emoticon to not load, since they are read as an incomplete html tag.
The best way to add a story is to use the text area feature, and copy and paste your document from Word or Open Office/Libre Office. There are less formatting issues and any that do crop up are easily handled in the rich text editor window. Keep in mind that the emoticons will have the same effect, however.