[s0xxx]

This might be the right occasion to exploit awk's "NF" built-in variable, which stands for the number of fields in the current input record separated by whitespace; whitespace in awk means any string of one or more spaces and/or tabs. So, NF is true if there are fields in the record:

$ cat -net test 
     1  FreeBSD$
     2  ^I ^I$
     3  DragonFlyBSD $
     4   $
     5  NetBSD$
     6  ^I  $
     7  OpenBSD$
     8    ^I  ^I$
     9  MirOS^I $

$ awk 'NF {print $0 "\n"}' test | cat -net
     1  FreeBSD$
     2  $
     3  DragonFlyBSD $
     4  $
     5  NetBSD$
     6  $
     7  OpenBSD$
     8  $
     9  MirOS^I $
    10  $
$

It says: "if there are fields in the record, print the record line and plus anotha newline; ignore all other lines".
To continue exploiting awk's other built-in variables, we might have written it as...

$ awk 'BEGIN{ORS="\n\n"} NF' test | cat -net -

       or

$ awk 'BEGIN{ORS=RS RS} NF' test | cat -net -

...or a bit more cryptic:

$ awk 'ORS=NF?RS RS:""' test | cat -net -

... which all do the same.

The only time it will not work is when you have multiple blank lines (containing either space, tabs or both) and you want to retain them, i.e. the format of the file. It that case, above awk command will only output a single newline.
Casual reader will notice an extra newline at the end, that is left as an exercise.

If one doesn't care about the format of the file and just want to kill all whitespace, then it's just a:

$ awk NF test | cat -net
     1  FreeBSD$
     2  DragonFlyBSD $
     3  NetBSD$
     4  OpenBSD$
     5  MirOS^I $
$

Simple heh?


P.S. I apologize for hijacking your thread @J65nko, I saw the others did and I had a bit of a inspirational moment...