Thanks to both of you! It's now working as a plugin without any file edits.
Here's the threadbit_process plugin code:
PHP Code:
if ($ignore["$thread[postuserid]"])
{
$thread['preview2'] = '';
}
else if (isset($thread['preview']) AND $vbulletin->options['threadpreview'] > 0)
{
$thread['preview2'] = nl2br($thread['preview']);
}
Then $thread[preview2] in the threadbit template will display proper line breaks when used for inline thread previews in forumdisplay.php.