I think that depends on browser, I think some do put a line break around divs.
I find that hard to believe, honestly. CSS support may be flaky in many cases, but even IE long ago got pretty much all of CSS1 down (okay, the box model implementation was slightly wrong until IE7).
It's not CSS support, it's HTML support - div is part of HTML. I just loaded a text file containing the following in Firefox:
<html><body> <div>foo</div><div>bar</div> </body></html>
It printed foo and bar on separate lines. The spec does say that some user agents add line breaks, it doesn't say if they should or not...