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If you're running OmniGraffle for iPad v1.6 or later, you can enable the new line behavior by tapping this link on your iPad:


To go back to the old line behavior, tap the following link:


(more than likely you should copy/paste those URLs and email them to whatever account you're using on your iPad)

You will have to "force quit" OmniGraffle after enabling the new settings by pressing the Home button twice to bring up the fast app switching tray, then tap-and-hold the OmniGraffle icon until the red "minus" badge shows, then tap that to quit the app.

The new behavior should be showing on the next launch.

For what it's worth, we're considering making the new line behavior a per-line setting with a checkbox in the Connections Inspector, which seems like the more robust thing to do, but that's still in the discussion stage.
"Vroom! Vroom!!"