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: 
Partial solution to resize label to a single line: Data labels in a chart will often wrap themselves, when you dont want them to. They would often seem better in a vertical single line above the graph item. Reset them to one single line by editing the text in the label, deleting the Excel imposed return, and replace it with a space. The line, and label box, will resize to fit a single line. However because you have "manually interfered with the lable, it will no longer update for changing graph data. You would have to double click each lable then reset it. Most annoying.
Manually insert a textbox into the bar chart and type in the label that way. It's annoying and labor-intensive, but it works.