execCommand("insertParagraph") has three behaviors in browsers. Gecko behaves the same as execCommand("formatBlock", false, "p"), which is not useful. IE overwrites the selection with an empty paragraph, which is also not useful. WebKit and Opera behave the same as though the user hit the Enter key, which is useful, and is what I specced.
I'm fixing this together with bug 748307, since the work is basically the same.