Originally Posted by JSWolf
Actually, I disagree. I fine 1.2em to be too large. I'd use 1.1em.
But, I use a font-size of 95% and a line-height of 1.03em. That works. But where the font size is larger then the body size like h2, I use 1.1em.
Readability is fundamentally determined by word-shape, which means you need enough negative space around the word so that the shape is clearly defined. A leading of at least 1.2em is generally regarded as adequate to provide this.
As I said, this does depend on the font, and you could get by with less if using a font with a particularly small x-height. But it's no co-incidence that fonts designed for high legibilty at small sizes typically have a large x-height and rely on a reasonable amount of leading to provide the negative space needed for shape-recognition.