The easiest and simplest way to do this, and the one recommended by Microsoft, is to RENAME the file (which in Vista is NORMAL.DOTM). The location of the file can be found in Word Tools menu under Options. Please let me know if you can locate the file.
The default location is :
C:\Documents and Settings\<username>\AppData\Microsoft\Templates
Navigate to that location and select the file NORMAL.DOTM. Make sure Word is not running, and close Outlook if open also. Right-click and select rename and change it to something like OLDNORMAL.DOTM. Word will recreate the NORMAL.DOTM file the next time it is started.
I recommend using this Microsoft approach since it resets your settings to their default, especially since we don't know what changed your line spacing in the first place. If for any reason this does not work for you please let me know.
Consultant
20+ yrs 'hands-on' PC hardware and software experience.