Outlook 2007 has an annoying feature where it assumes that every time you hit the enter key in a new message that you automatically want it to be double spaced. You can easily just hit SHIFT+Enter to invoke this single space return but that get annoying after a while. Here is how to make you Enter key just do a single space return.
Step 1
In a new email message click on the Format Text Tab
Step 2
Click the Change Styles button
Step 3
In the drop down click Style Set then click Word 2003
Step 4
To make it the default for all messages click the Change Style button again and this time click Set As Default
Here is a screen shot of the icons that you are clicking on.
