By default, Outlook 2007 displays messages more than single spaced.  To permanently change these settings, follow the instructions below:

1.  Click New to create a new email message.
2.  Click in the body of the email where you would type your email message. 
3.  Click on the Format Text tab. 
4.  Located in the Paragraph group, click the Paragraph Dialog button .  
5.  Midway down on this window is an option labeled Line spacing.  Click the down arrow and
     select Single.
6.  Click the Default button located at the bottom of the Paragraph Dialog window to save
     single spaced as the default setting.

Now all your email messages will be single spaced.