I would be looking at the document compatibility and layout options. If you go to File > Options > Advanced, scroll to bottom and verify both docs have exactly the same Layout options and Compatibility options.

The compatibility options won't be visible unless the document is saved in compatibility mode but there are settings there that do exhibit the spacing behaviour you are demonstrating. eg Suppress extra line spacing the way WordPerfect 5.x does

__________________
Andrew Lockton
Chrysalis Design, Melbourne Australia

Thanks for all the replies.

It was a combination of all of the above. I just stripped back all the manual edits, set the right compatibility options, then applied our styles.

Sorry re: cross-posting. Didn't have much luck at Technet.

PS: Does anyone know if it's possible to automate changing 'Lay out this document as if created in:' option?

These documents are set to Word 2003, and if I capture changing it in a macro to Word 2010, the macro captures just the ones that changing it to Word 2010 sets.

It leaves all the ones from 2003 checked too, so end up in Custom mode!