What else are you doing to $text as your code, $text =~ s/\n\s*/ /g; deletes space chars preceeded by newlines, which looking at your test case seems to do what you want (in this case):

my $this = '<thing>
 condition
   condition
    randomness
      other junk
</thing>';

print "before: $this\n\n";
$this =~ s/\n\s*/ /g;
print "after: $this\n";

__END__
before: <thing>
 condition
   condition
    randomness
      other junk
</thing>

after: <thing> condition condition randomness other junk </thing>
[download]

One thing though is that \n is in the set of \s characters so $text=~s/\s+/ /g; should suffice.

-enlil