that's weird.. it worked for me. i get an indent without 2 line breaks if i don't use the <br> tag. when you use the <div> tag, it always puts it on a new line. i took it from 5em to 1em because 5 seemed a little big. here's my code and i've attached a screen shot.
PHP Code:
<html>
<head>
<style>
DIV{
TEXT-INDENT: 1em;
}
</style>
<body>
<P>This is LIne 1
<DIV>This should be line 2, indented</P>
</body>
</html>