Beyond line breaks within links, it's generally a Bad Thing in terms of simple UI rules: "thou shalt be consistent."

If the position of the navigational links changes depending on the width of your browser window, it greatly slows down one's ability to navigate the site. It requires you actually read/skim through the links every time you want to go use them (well, every time your browser window changes width, which for me (and many other developers with lots of windows open) is often), rather than being able to move your mouse to a consistent location within the browser window, knowing that the link to section X is always *right there*