How to define a function in ghci across multiple lines?

It looks like :{ and :} are a pretty new feature. You may need to upgrade GHC.

Edit: confirmed, see http://www.haskell.org/ghc/docs/6.8.2/html/users_guide/release-6-8-2.html

Dan is correct, but :{ and :} must each appear on their own line:

> :{ 
> let foo a b = a +
>           b
> :}
> :t foo
foo :: (Num a) => a -> a -> a

This also interacts with the layout rule, so when using do-notation it might be easier to use braces and semi-colons explicitly. For example, this definition fails:

> :{
| let prRev = do
|   inp <- getLine
|   putStrLn $ reverse inp
| :}
<interactive>:1:18:
    The last statement in a 'do' construct must be an expression

But it works when braces and semi-colons are added:

> :{
| let prRev = do {
|   inp <- getLine;
|   putStrLn $ reverse inp;
| }
| :}
> :t prRev
prRev :: IO ()

This will only really matter when pasting definitions from a file, where indentation might change.

For guards (like your example), you can just put them all on one line and it works (guards do not care about spacing)

let abs n | n >= 0 = n | otherwise = -n

If you wanted to write your function with multiple definitions that pattern match on the arguments, like this:

fact 0 = 1
fact n = n * fact (n-1)

Then you would use braces with semicolons separating the definitions

let { fact 0 = 1 ; fact n = n * fact (n-1) }

GHCi now has a multiline-input mode, enabled with :set +m. For example,

Prelude> :set +m
Prelude> let fac 0 = 1
Prelude|     fac n = n * fac (n-1)
Prelude|
Prelude> fac 10
3628800