Right now I'm fighting with Outlook 2007, trying to get some space between paragraphs, but neither margin-bottom or padding-bottom work. I'm aware that Outlook doesn't like padding generally but I figured it was worth a try.
OK it turns out that it likes 'margin-top' but Hotmail doesn't, wonderful!
I've managed to get around this by adding the same value for both 'margin-top' and 'margin-bottom'. Strangely enough it doesn't look odd and renders fine in Apple Mail, Outlook 2007, Gmail and Hotmail.
Thanks for letting us know your fix, Robert. Another option is to experiment with line-height... Yes, Outlook and Hotmail are particularly bad when it comes to handling margins!
Did you get the same problem with Outlook 2010?
You can sometimes use <div>s inside table structures to help. You can then add margins to these(but Hotmail doesn't like margin-top).