Single spacing appears doubled, doubled spacing appears tripled in e-mail.

I have a live.ca e-mail address and my friend has an outlook.com e-mail address.

When they receive my e-mail, the spacing is being doubled. As in... single spacing between sentences appears double spaced, double spacing between paragraphs appears tripled. Yet, on my end, when I created the e-mail, it looks fine.

Also, when I receive their e-mail and they send an image within the message, instead of the image there's a small square which looks like a little mountain. The image appears as soon as I click on reply. Then afterwords anytime opening the e-mail the picture shows no problem.

Are the 2 e-mail programs just conflicting with each other?
(I've had the live.ca e-mail addy for a few years and they just created the outlook.com e-mail addy recently).