Cannot adjust margins between <p>'s

[dkoro]

I have a very simple page with a left menu column, and for some reason I just cannot tighten up the spacing between the <p>'s in the left column (the "Item #1" etc)...setting both margins and padding to 0 has no effect. Its driving me crazy! Currently its in a <blockquote> which I thought was the problem but removing the <blockquote> doesn't help. Any ideas? Here's the style sheet:

body {
    font-family:Arial, Helvetica, sans-serif; 
    background-color:#c0e1e6; 
    margin:0; 
    padding:0;
    }
 
#wrapper {
    overflow:auto;
    }
 
#top {
    background-image:url(homepage-top.gif); 
    background-repeat:no-repeat; 
    height:108px; 
    display:block;
    }
 
.colorbar-top {
    height:38px; 
    background-image:url(colorbar-top.gif); 
    background-repeat:repeat-x;
    }
 
.colorbar-bottom {
    height:22px; 
    background-image:url(colorbar-bottom.gif); 
    background-repeat:repeat-x;
    }
 
.maincontent {
    background-color:#FFF; 
    background-image:url(homepage-centerbkg.jpg); 
    background-repeat:no-repeat; 
    background-position:top left; 
    height:293px; 
    margin:0; 
    padding:0;
    }
 
.interiorcontent {
    background-color:#fff; 
    margin:0; 
    padding:20px; 
    overflow:auto;
    }
 
a {
    color:#0072b1; 
    text-decoration:none; 
    font-weight:bold;
    }
 
.bluetext {
    color:#0072b1; 
    font-weight:bold;
    }
 
.footer {
    font-size:11px; 
    color:#FFF; 
    margin:0 100px 10px 100px; 
    padding:10px; 
    float:right;
    }
 
.leftmenu {
    float:left; 
    width:170px; 
    font-size:14px; 
    font-weight:bold; 
    padding:0 10px 0 10px;
    }
 
.rightcolumn {
    border-left-color:#c0e1e6; 
    border-left-style:solid; 
    border-left-width:1px; 
    margin-left:200px; 
    padding:0 0 0 25px;
    }
 
.goldtext {
    color:#FF9C00;
    }
 
.graytext {
    color:#C1C1C1;
    }
 
.smalltext {
    font-size:10px; 
    color:#B4B4B4;
    }
 
.clear {
    clear:both;
    }

[drhowarddrfine]

What you are fighting is the height of the line for the text. Add 'line-height' to the css of that paragraphs and you can either set the px or, maybe better, adjust by less than 1em; ie, .8em