When wielding the Type tool, you can create a text layer in one of two ways. Either click in the Comp window (to create Point Text), or hold the left mouse button down and drag in the Comp window (to create Paragraph Text).
Point Text treats each line you type as a separate block of text. New lines will only be created when your press the Return (Enter) key.
Paragraph Text wraps text around to the next line when your type reaches the edge of the current line. The edge-the text's bounding box-is defined by how far you dragged the mouse when you created the paragraph text layer. You can resize the bounding box (for Paragraph Text only) by selecting the text using the Type tool, clicking to place a cursor within the text, then dragging on one of the sizing handles around the perimeter of the bounding box. Shift-dragging a sizing handle will constrain the proportions of the bounding box. Make sure you don't accidentally drag a sizing handle with the Selection tool, or you'll scale the text, not its bounding box.
After Effects 6.5 you can convert between horizontal and vertical text. Make sure the text layer is not in editing mode.
Select the Type tool
Contextual click within the text layer.
Choose Horizontal or Vertical, then adjust after AE changes the block.