In this case, my best advice is to upgrade to the latest version to benefit from the new features, skins and controls we have added in the last 4 years.
As for the paragraph spacing - this does not come from the skins of the control, but from the CSS the developer has provided to it, or from the CSS on the page.
By default, the editor takes the CSS rules from the page and imports them in its content area so it gets similar appearance and rules as the page it is used in. Thus, global selectors in the site stylesheet for paragraphs and line breaks are likely to cause such behavior. You can avoid inheriting them by specifying your own (or an empty) stylesheet in the CssFiles collection and for the ContentAreaCssFile http://www.telerik.com/help/aspnet-ajax/editor-content-area-custom-stylization.html.