I can understand the confusion. In Word 2003 and earlier, the line-spacing settings were tucked away inside a formatting menu. But if you use Word 2007 or 2010, you'll be pleasantly surprised to find a line-spacing control right on the Ribbon.
Rather than my usual step-by-step instructions, I thought I'd share this informative video on . (Although the video specifically calls out Word 2007, the steps are the same for Word 2010.)
You know what they say: a tutorial video is worth a thousand words. Or something like that.