IMHO line-height: 1 is non-standard and not friendly to older eyes (even those that can read at normal font size). 1.2 is
standard
I also set the line height in <body> and then only for
Exceptions like icallaci has outlined

I do use a big line height (2-3) for chapter numbers with titles to control spacing
Code:
<h3 class="chapno">1 <br /> A Chapter w/Title</h3>
(This single heading way also includes the title in the TOC without having to resort to title="" in the H3 tag )