Has the line spacing decreased on this version of Palatino? It sure looks like it.
I've noticed that I've been reading with far bigger fonts than necessary on the PW. Many of my paperbacks use a font comparable to (my) DejaVu Serif on size 2, line spacing 3. (Yes, I counted and measured it.) I can read that well enough (in the book) despite my poor eyesight. On the Touch, everything below size 4 became unreadable because the darkness of the screen compared to a book, in most lightning conditions.
On the Paperwhite however, with the light boosted to 10 so the screen matchs the paperback in brightness, I can read DejaVu Serif size 2, spacing 3 without problems. I never tried anything smaller than 4 on the Touch.
In addition, I've found that I like to have more spacing when using smaller fonts, or I'll lose my line when reading. On size 2, I like spacing 3. On size 3, I can get away with spacing 2. And on size 4, I can use spacing 1. Actually, size 3 spacing 2 fits more characters per page than size 2 spacing 3 (1584 vs. 1530), while the fonts are larger
I like that trade.
I think that DejaVu Serif size 3 spacing 2 (1584 c/p) is slowly replacing Caecilia size 4 spacing 1 (1305 c/p), and I've used DejaVu Serif size 4 spacing 1 (1429 c/p) as an intermediate step.
I'll post some screenshots later, and also try JSWolf's requested comparison between Charis SIL Compact size 3 spacing 1 vs. Caecilia size 3 spacing 1 using a KF8 book.