Having had this argument a few times, it makes me very happy to read Slate’s takedown of double-spacing after sentences:
Every modern typographer agrees on the one-space rule. It’s one of the canonical rules of the profession, in the same way that waiters know that the salad fork goes to the left of the dinner fork and fashion designers know to put men’s shirt buttons on the right and women’s on the left. Every major style guide–including the Modern Language Association Style Manual and the Chicago Manual of Style–prescribes a single space after a period. (The Publications Manual of the American Psychological Association, used widely in the social sciences, allows for two spaces in draft manuscripts but recommends one space in published work.) Most ordinary people would know the one-space rule, too, if it weren’t for a quirk of history. In the middle of the last century, a now-outmoded technology–the manual typewriter–invaded the American workplace. To accommodate that machine’s shortcomings, everyone began to type wrong. And even though we no longer use typewriters, we all still type like we do.
Update (1/15/11): Apparently The Bluebook style guide for legal writing suggests two spaces.