As far as NaNoWriMo is concerned it doesn't matter because you have to submit your text for word count verification in a digital format anyway. For your own use the choice is yours, but I think the spacing really depends on what you plan to do with your draft once NaNoWriMo is over. If you don't think you're going to revisit it, or if you plan to just turn it into a digital file, then single spacing is fine and you'll save a few trees in the process.
The system I worked out and used last year was perfect for me, and I plan to do the exact same thing this year. It might sound a little complicated and laborious, but it's actually very quick and easy to do - which is important if you're actually averaging the 1.7k words per day to reach the 50k mark.
Here's what I do: Since it's a first draft, and I expect that there will be multiple re-writes, I always double space the lines to make sure I have plenty of room to physically edit the text later on. Once I'm done for the day, I create digital copies of the day's pages by scanning and saving them as Word files using OmniPage 18. The Word files are merely a digital backup of my work. Future editing and rewrites will be done using the original typed pages as I prefer the paper, pen, and typewriter method rather than staring at a monitor for hours.
Once I have the Word file for that day's output, I copy and paste the text into Scrivener software. This is a completely optional step. Scrivener just helps you organize chapters, develop characters and locations, and gives you a place to store your research material (I'm writing a historical fiction, so there's a lot of research involved). Scrivener will also output a digital manuscript that you can submit to NaNoWriMo at the end of the month for the word count verification. You can do this with Word (or any other word processor) too, but I like the convenience Scrivener provides by pulling together seperate chapters.
Finally, I keep a copy of the Word and Scrivener files on a backup drive. This means that I have five copies of everything that I've written, one hard copy, and four digital copies (two Word and two Scrivener files).