email variables behave differently in my email vs contacts or leads

[battle]

I'm having trouble with the email variables in templates. I'm in Sugar CE 6.1
I've got a working template that works correctly in terms of substituting variables IF I compose the email from either the leads or contact window, but does not format the html in the body correctly dropping "<br />" (break) commands so that no white space appears between paragraphs which actually show up as divs for some reason.

But if I use the compose feature in my email the variables such as $contact_first_name do not get substituted. The formatting however turns up correctly.

I've got embedded links in the email body so I prefer html vs plain text.

The main issue is that I don't want to have to send email from a single contact or lead. It defeats the whole purpose of having email available inside sugar.

Does anyone know what is going on there and why the email variables e.g. $contact_first_name do not get substituted correctly from my email and why they work is sent directly from a contact or lead?

BTW I've check for other threads and I'm not in developer mode, and the fields involved to have content.

Thanks...

[battle]

bump. bump.