If you view this page in a web browser it looks fine, right? But if you view the source, you'll see a different story: this first paragraph appears as one really long line that you have to scroll horizontally to read. That's because it contains no "hard returns" that specify where one line ends and the next begins. Now imagine you're a TA grading an assignment with this paragraph. You'd get pretty frustrated having to scroll a long way to read this far, wouldn't you? So as a general rule, you should make sure your source doesn't have any line that's more than 80 characters wide.
If you view this second paragraph in the source, you'll see something rather different: a sequence of lines that appears within the "View Source" window that is easily readable without any horizontal scrolling. This is because each line ends with a "hard return" (what you get by pressing the "Enter" or "Return" key on your keyboard). Again, put yourself in the grader's shoes. Which paragraph would you rather read?
Because of this, points will be deducted for HTML source files containing lines that that require horizontal scrolling to read (i.e., are wider than 80 characters).
Moral: in addition to checking that your HTML displays beautifully in the browser, you should also check that the source displays beautfully when you view it. In particular, it should be readable without horizontal scrolling, and the elements should be indented in a way that makes their nesting structure clear.