I do not get this issue myself:
$('<textarea>').load('./styles/style.css').appendTo('body');
I insert that into the page:
http://www.balupton.com/sandbox/jquery-sparkle/demo/
And it displays as expected.
The issue probably lays with the line endings used. The web uses "\n" while some versions of mac use "\r", and windows uses "\r\n".
Or if you are trying to display it in a DIV, you will have to use the CSS white-space: pre; to show the line spaces without converting them into BRs.
Edit: forgot the dash in white-space.