Question: I Have created a bar chart in a 2007 .xls file, but the data labels cannot be resized. When you go to the "format Data Labels" and then click on alignment, the Autofit and Internal Margin option is grayed out. Anyone know why?

Answer: 
Here's a trick that worked for me:

My problem was: I added more text to the axis title and it was too long for it's original shape so some text went into second line. 

My solution: I type the complete text somewhere else, copy the text, double click on the axis title and delete the original text -- the cursor would still be there -- now insert the copied text. Done! They are all in one line!
Manually insert a textbox into the bar chart and type in the label that way. It's annoying and labor-intensive, but it works.