In the find and replace, under 'more > special' you can find the paragraph marker (^p). With a bit of fiddling, you will find that that is all you need!

Ctrl+H will bring up the Find and Replace menu

First Find [^p^p]
Replace [**]

then Find [^p]
Replace [ ] - 1 space

finally Find [**]
Replace [^p^p]

This then takes all the paragraphs (1 marker at the end of the paragraph, and one clear space in between) and turns them into another symbol [**], then it takes all the paragraph markers that are at the end of each line and replaces them with a space - this gets all the lines back together, finally replacing all the paragraph breaks.

This is only a rough idea, whether you need to tweak it is dependent on your file.

If you record this as a macro in Normal.dot, the you can run it again later, when you want to format another document!