There are two elements to setting line spacing in Word: 1) line spacing,
and 2) spacing before and after a paragraph. In Word 2007, the default
line spacing in Word 2007 is 1.15, the default spacing before a
paragraph is 0 points, and the default spacing after a paragraph is 10
points. You need to change the Normal style line spacing to single and
the spacing after to 0 points, and then click on Default. See
http://office.microsoft.com/en-us/word/HP100165231033.aspx "DRAFT:
Adjust the spaces between lines or paragraphs" for more information.