In most cases, you would probably want to put equations and complex formulae on their own separate, centered, equation lines. But sometimes there are reasons to write them 'inline', for example if you just mention something that you have already proven. LaTeX assumes by default that fractions are meant to have the same height as the surrounding text, if they are written inline. This is nice when you write 'a third' or 'a fourth' with numbers instead of words, but more complex fractions can become very difficult to read.
To solve this problem, just include the amsmathpackage and use \dfracinstead of the usual \frac. The same command can be used inside other dfrac's, to make the formula really high. In the same way, there is a \tfracto give the fraction text height. (t=text-style, d=display-style) Of course, this is not as interesting, since you can produce the same thing by writing $$\textrm{$\frac{1}{3}$}$$(although it is a rather disgusting way to do it).
\documentclass{article} \usepackage{amsmath} \begin{document} One third is the same as $\frac{1}{3}$. Introduce the variance estimator $s_p^2=\frac{(n_x-1)s_x^2+(n_y-1)s_y^2}{(n_x+n_y-2)}$. \vspace{10pt} One third is the same as $\dfrac{1}{3}$. Introduce the variance estimator $s_p^2=\dfrac{(n_x-1)s_x^2+(n_y-1)s_y^2}{(n_x+n_y-2)}$. \end{document}