The list formatting does not include line spacing. To have different line
spacing for each level in the list, associate a unique paragraph style (with
the desired line spacing defined) with each numbering level.
Here's how to do that: Place the insertion point in the first top-level item
of your list. On the Home tab, click Multilevel List and then click Define
New Multilevel List. In the dialog box, first click the More button to see
all options (if necessary). Then, for each level, choose a style name in the
"Link level to style" box. When you are done, click OK.
Note that assigning a paragraph style for each numbering level has been the
recommended approach for Word versions 97 and later. The difference is that
Word 2007 no longer allows you to access the numbering options via the
top-level paragraph style (which was the recommended approach in older
versions; see
http://www.shaunakelly.com/word/numbering/OutlineNumbering.html).
The new approach offered by Word 2007 is to create a list style, via Home
tab | Multilevel List | Define New List Style. Once created, a list style
appears at Home tab | Multilevel List (under "List Styles"). The advantage
of list styles is that they can be modified via the Modify Style dialog box
like any other style, but note that list styles do not replace assigning
paragraph styles to numbering levels.