How about this?

$text = "This is not good,\n you know what I mean?\n\nThis should be o
+n a separate line.";
$text =~ s/[^\n](?:\n)|(\n)\n[^\n]/$1/g;
print $text;
[download]

Which produces this:

This is not good,you know what I mean?
This should be on a separate line.