Confused by the different dialogue formatting

[Chris]

When writing dialogue I format it with a space between each speaker. (example)
"Did you hear that?" said Jack.

"What? No." said Jill. "What did you hear?"

"I don't know," said Jack. "Maybe it was nothing."

But I see a lot of writers writing dialogue without any spacing. (example)
"Did you hear that?" said Jack.
"What? No." said Jill. "What did you hear?"
"I don't know," said Jack. "Maybe it was nothing."

I also see some writers indent their dialogue while others don't.
Did I miss a change in formatting standards? Are both acceptable?

[Feliks]

I very much dislike example #2. Where do you see this being done? (Self-pubbed) euthors?

White space is important for the reading eye as it moves down the page.