Word and OpenOffice both have an automatic function to put in double spacing. For Word, it's in the 'Paragraph' menu option (pre-2007)(one of the top menus, don't recall which one). For 2007, it's on the 'Home' tab, 'Paragraph' section, right next to the alignment buttons.
In any version, you can set exactly how much spacing you want between the lines. Default for Office 2007 (and might be for previous versions, don't remember) is 1.15 spacing. When using this feature, you don't need to press enter to double space and it won't capitalize every first letter of every line. Just type normally and it will double space as you go. No need to edit any autoformat settings or anything else.