It used to be 2 spaces because it was standard for typewriters. I think recently, not sure about the exact time frame, one of my friends told me that with the current printer technology and MS word, or other word processing software, an extra white space isn't neccessary to distinguish sentences.
eh, I just listened to him and I'm doing 1 space now, but sometimes I can't stop myself from typing 2 spaces after a period, its a force of habit. Oh well. However, when I write a formal paper, I typically make sure that I have 1 space after a period now.