The debate if over: double spacing after a period is wrong
In case it was still a question, Microsoft has settled the single space/double space debate: one space is correct, two spaces is not. Word will now flag two spaces after a period as an error and offer to correct it.
In case you couldn’t tell me feelings on the matter, I hope the picture below will clear that up. I haven’t seen this feature yet, but if it also offers to correct two spaces after a close quotation mark, I’ll be ecstatic!