[funkydunk]

The space is caused by the </tr> at the top - i presume you are using Netsacpe or other standards compliant browser.

Change the file to:

<table border=0 width=100% cellspacing=0 cellpadding=0<tr>   <td>    
  <table border=0 width=100%>
   <tr>

  {section name=product loop=$products} 
  <td valign="top"> 
    <table border=0 width=100%><tr> 
      <td width="20%"  align=center valign=top><a href=product.php?productid={$products[product].productid}&cat={$cat}&page={$navigation_page}>{include file="product_thumbnail.tpl" productid=$products[product].productid image_x=70 product=$products[product].product}
{ $lng.lbl_see_details }</a></td> 
      <td valign=top width=100% >{$products[product].product|escape}</font> <font class=TableCenterProductTitleOrange></font><font size=1>

{$products[product].descr|truncate:100:"...":true}
</font><hr size=1 noshade width=130 align=left> 
      {if $active_modules.Subscriptions ne "" and $products[product].catalogprice} 
      {include file="modules/Subscriptions/subscription_info_inlist.tpl"} 
      {else} 
      {if $products[product].price ne 0} 
      {if $products[product].discount ne 0} 
       
<font class=MarketPrice>{$lng.lbl_market_price}: <s>{math equation="(price/(100-discount))*100" price=$products[product].price discount=$products[product].discount format="%d.00" assign=unformatted}{include file="currency.tpl" value=$unformatted}</s> </font>
 
      {/if} 
 <div align="left">     
<font class=TableCenterProductTitleOrange>{$lng.lbl_our_price}: {include file="currency.tpl" value=$products[product].price}</font><font class=MarketPrice>{include file="customer/main/alter_currency_value.tpl" alter_currency_value=$products[product].price}</font>{if $products[product].discount ne 0}, save {$products[product].discount}%{/if} 
      {else} 
     <div align="left">  <font class=TableCenterProductTitleOrange>{$lng.lbl_enter_your_price}</font> 
      {/if} 
      {/if} 
      </td></tr> 
    </table> 
  
  </td> 

  {if $smarty.section.product.index is odd} 
    </tr> <tr>
  {/if} 
  
  {/section} 
  
</tr>
</table> 
</td></tr></table>