I'd only like to add that the grep man page does provide the answer your question, or at least part of it. Read the section on basic vs. extended regular expressions. They apply to both grep and sed.
Don't forget also that there are info
pages that go into more detail, as well as plenty of tutorials available on the web.
I'll end by mentioning that sed alone has pretty much all of the function of grep and tr built-in; meaning that you should only very rarely need to use them in tandem. How about simply adding a newline to the sed replacement string, for example?
Oh, and please use [code][/code]
tags around your code, to preserve formatting and to improve readability.