When I started editing, the double-spaced manuscript rule was in all the guidelines. We read and edited all on hard copy, so double spacing was helpful for marking corrections.
But now in an age where I'm reading much more on my computer screen or downloading to my Kindle, I find double-spaced text very annoying. On the rare occasions now when I do print out a manuscript and need space for notes, I have done the 1.5 line spacing, but even that seems rather spread out if I'm looking at it on a computer screen.
And I certainly can't type something that is double-spaced!
So, tell me, do you still work with double-spacing on your manuscripts, or do you change the line spacing at the last minute to meet a guideline?