LaTeX is an excellent text processor for producing nice documents of any complexity. It is particularly well suited for a PhD thesis with many images and mathematical expressions.
Starting from scratch is a bit tedious, however, you can always use a template that someone else inherited. This archive contains just such a template. It produces a thesis which follows the regulations (at least when I (mhagdorn) wrote my thesis in 2003). It can also produce a single space pdf document with hyperlinks.
Just download the archive and unpack it using
tar xvzf thesis_20110817.tar.gz
The archive contains a number of directories and a README file. Please consult the README file for further instructions/explanations. You can also send a message to IThelp@geos.ed.ac.uk. Suggestions and improvements are most welcome.