If your using the RichFaces library you can also use the tag rich:spacer which will add an "invisible" image with a given length and height. Usually much easier and prettier than to add tons of nbsp;.
I found that the parser would complain if I used the entity in my page. After a little research, I learned that if I added a DOCTYPE declaration to the beginning of the page, the entity was allowed. I use this DOCTYPE declaration:
<!DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Transitional//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-transitional.dtd">
A side effect of this is that the resulting code (as seen by using the "view source" feature of a web browser) doesn't actually contain the entity. It instead includes the actual characters that represent a nonbreaking space. Although it works, it's not really what I want. I'm still looking for a way to make the parser not replace the entity with the character.