Use markdown to render the project description.

app/views/projects/show.html.haml

@@ -20,7 +20,8 @@
       %span.add-on git clone
       = text_field_tag :project_clone, @project.url_to_repo, :class => "xlarge one_click_select git_clone_url"
 
-= simple_format @project.description
+- if @project.description.present?
+  = markdown @project.description
 - unless @events.blank?
   %h5.cgray Recent Activity
   .content_list= render @events