C# tooltip issue with lines from listbox items

The SetToolTip method sets the text of the tooltip - it does not append text to it (or it would be called AddTooTipText instead). You need to assemble a single text string to set the value with:

StringBuilder sb = new StringBuilder();
foreach (string s in listBox1.Items)
    {
    sb.AppendLine(s);
    }
toolTip1.SetToolTip(txtDescription, sb.ToString());