Ahh, it looks like it is the font Lucida Sans causing the problem. When I change the font to something else, the spacing goes back to normal. The font on the PC is the same 'version' as the one on everyone else's.

I have tried replacing the Lucida Sans font on her computer with the one from my computer but that doesn't make any difference.

Why would this one font suddenly want to act so strange? It worked fine on her old PC?