I use FlowLayout mainly due to the poor results with GridLayout and its support (or lack of) for browsers other than IE. If your only concerned with supporting IE browsers then GridLayout would be ok.

As far as the HTML formating yeah its a PITA. I hard code 95% of my pages so it's really not an issue for me. You can view the page in design and switch back to code without it auto-formating as long as you don't change anything while in design mode (I know, a lot of help that was).

When I do need to reformat I load the page into Macromedia's Dreamweaver MX and let it reformat the code. Dreamweaver's reformat (though not perfect) does a pretty good job with the HTML.