I'm temporarily using the solution posted here :

/blog/?page_id=393/bugs/jqgrid-3-8-1-celledit-enter-key-saves-cell-instead-of-adding-new-line-in-textarea-with-solution/

I'm using JQGrid 4.1.1. I had to REPLACE:

if (e.keyCode === 13) {$($t).jqGrid(“saveCell”,iRow,iCol);}//Enter

WITH

if (e.keyCode === 13 && (e.target.tagName === undefined || e.target.tagName != 'TEXTAREA')) {$($t).jqGrid(“saveCell”,iRow,iCol);}//Enter

Another common issue with the textarea is that on Save all the line breaks go away. Temp solutions from here:

http://www.trirand.net/forum/default.aspx?g=posts&t=337

I had to REPLACE:

if($t.p.treeGrid && $(“.tree-wrap”,$(tcell)).length>0) {