I am using custom templates for different categories and they work fine...however item formatting does not override, therefore any formatting done in item editing will not show...This includes font size, styles, paragraphs etc...text displays using ONLY formatting from custom template. 

How to get item formatting to show?

jwcooper.net/about-jw-cooper/item/136-the-visionary.html

If you are using firebug you will see the correct custom template for the text body, but the text is one big blob, not even showing the proper paragraph breaks...

The link you provided leads to 404 page.

er, sorry...try this one...even worse...I wanted a drop cap, as well a list at the end...

gertrudezachary.com/our-stores/item/179-nob-hill-store-infor...

and this is the code entered in the "item -- content" for this store description...apparently the forum will not display the code as "code" but maybe you'll get the picture...
**The eclectic shopping district of Nob Hill, Albuquerque, has been called the "Melrose of the Desert". Melrose Ave in Los Angeles has nothing over Nob Hill, except maybe the prices. Our Nob Hill store features a select display of exquisite jewelry items (that's what we're known for) as well as the most eclectic selection of interior decoration items in the city, such as...

Lamps and Lighting,
Antiques of Old World Origin,
Native American and Contemporary Jewelry.


*

Try this. Go to the k2 general parameters and locate the Content Cleanup Settings . Enable the cleanup introtext or fulltext (if you don't have them already) and exclude the elements you don't want to be cleaned up, such as ul, li, p, a, etc.

Thanks for your replies yiota...i have just implemented this function, but for some reason it does not show differntly...possibly some caching that i have to somehow discover and flush...i shall let you know if it finally has an effect...
It seems to me that the custom template overrides is expressing the final word on the display... i am trying to refine this technique on two sites, and seems to be the same on both...

Yiota Ziaggou said:Try this. Go to the k2 general parameters and locate the Content Cleanup Settings . Enable the cleanup introtext or fulltext (if you don't have them already) and exclude the elements you don't want to be cleaned up, such as ul, li, p, a, etc.

You are correct...finaly got the parameters to apply...my issues with bad html and misunderstanding of "intro" and "fulltext",...thanks for the right solution...