In the previous version soft text wrap was working perfectly. Each time the line goes til the end of the editor it will start from the next line. The line numbers were preserved. In new version 1.4 it does not work the same way, thus forcing to use hard wrap. It would be nice to have both choices as in version 1.3
As far as I remember we did not change anything related to softwrapping. Maybe you have changed your eclipse version? Did you try the Texlipse 1.3 with your current eclipse version?
Sorry, it is incorrectly posted. I found the difference in the settings I had.