Screen Shots:
Before: http://img205.imageshack.us/img205/899/beforedw4.png
After: http://img164.imageshack.us/img164/2630/aftergv7.png

To make the view of the 'user profile' page compact, add the following CSS to the end of your theme's .css file. This is generally better than modifying the profile.css or user.css (or drupal.css in 4.7) directly.

.profile h2.title {
  margin-top:13px;
  border-bottom-width: 1px;
  border-bottom-style: solid;
}

.profile dd {
  min-height:10px;
  margin:5px;
  margin-top:13px;
  margin-left:180px;
  margin-bottom:0px;
  padding:0px;
  width:300px;
  height:auto;
  position: relative;
  border-bottom: 1px dotted #d9d9ff;
}

.profile dt {
  width:180px;
  background-color: #DEE;
  border-bottom: 1px solid white;
  float:none;
  margin-bottom: -30px;
}

Alternate version using a floating dt

.profile h2.title {
  margin-top: 15px;
  border-bottom: 1px solid #777777;
}
.profile dt {
  margin: 0;
  padding: 2px 3px;
  width: 120px;
  background-color: #dee;
  border-bottom: 1px solid white;  
  float:left;
}
.profile dd {
  margin: 0 0 0 130px;
  padding: 2px 3px;
  border-bottom: 1px dotted #d9d9ff;
}

Note that if the changes aren't showing up it is probably because of caching so clear your browser's cache (F5 works on many browsers.)

For Drupal 6 - Garland Theme

.profile h2.title {
margin-top:1.5em;
border-bottom-width: 1px;
border-bottom-style: solid;
}

.profile dd {
min-height:0em;
margin:.0em;
margin-top:-1.4em;
margin-left:18em;
margin-bottom:1em;
padding:0em;
width:30em;
height:auto;
position: relative;
border-bottom: 1px dotted #d9d9ff;
}

.profile dt {
width:18em;
background-color: #DEE;
border-bottom: 1px solid white;
float:none;
margin-bottom: 0em;
}

Firefox and IE compliant with drupal 6.9 with Bealestreet-6.x-1.0a1

/* testing profile */
.profile {
clear: both;
margin: 0.5em 0;
border: 2px solid #5B8261;
}
.profile .picture {
float:left;
margin: 1em 1em 1em 0.5em;
}
.profile h3 {
border-bottom: 0px solid #5b8261;
color: #5B8261;
padding: 0px 0px;
}
.profile h2.title {
margin-top: 15px;
border-bottom: 0px solid #5b8261;
}
.profile dt {
margin: 0;
padding: 2px 3px;
width: 120px;
background-color: #000000;
border-bottom: 0px solid white;
float:left;
}
.profile dd {
margin: 0 0 0 130px;
padding: 2px 3px;
border-bottom: 0px dotted #5b8261;
background-color: #000000;
color: #ffffff;