Here is a one-liner. It preserves a final "\n" if one or more exists.

    perl -00 -pe 's/ $/\012/ if s/\n+/ /g and eof' file
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Here are some variations:

    perl -00 -pe '(eof) ? s/\n\n/\n/ : s/\n+/ /g ' file

    perl -00 -pe 's/\n+/(eof) ? "\n" : " "/eg '    file
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Choose eof or eof() to get the desired effect when dealing with multiple files.

--
John.