CSS - Line height property, how it works (simple)

Question

So in this simple example I have as final result:

This is a very simple question but I sim

Answer 1

Ok I'm quite sure I got it now, I'll answer my own question, thanks to all you answers this would be a more graphical explanation (which always helps me):

This is just a complement to jarret's answer (the first one to nail it IMHO)

Thanks for all the helpful answers

BTW: Sorry for the horrid artwork.