I recall that there is a way to tell Perl to not look at the new line character as the end of a record, so that the whole file could be globbed into one string for processing, then written back out easily. But I can't remember where I read that, or what it was called. Does anyone know what I'm talking about?

Slurp. Read about the INPUT_RECORD_SEPARATOR variable: $/

Once you have your slurped input, if you need to output as paragraphs, Text::Wrap may be helpful.

Update: If you don't want to muck with $/, you could use the slurp function from File::Slurp.