Line spacing confusion

I have a Kobo Mini which I have had for a few days. Great little device, but I am a bit confused over line spacing. I downloaded a txt file and converted it to epub format in Calibre before side loading into the Mini. When I came to look at the book it had quite a large line spacing which I could only make reasonable by lowering the font line spacing setting to the lowest on the Kobo. I seem to be defaulted to the Georgia font. However I loaded another epub file that I had downloaded but not converted and the line spacing seemed more of what I would expect. I tried line spacing on this file and it seemed to have no effect. This is what confused me. How come line spacing works on one epub file but not another.

Is Georgia the usual default font and the best one to use?