I have just updated my wordpress to 3.5 version and also nextgen from 1.9.3 to 1.9.10 and suddenly I got way too much of white spacing between the gallery thumbs and the caption. I was looking around for an answer for that but I could not find anything, no solution whatsoever.
This thread however link gave me an idea to check other files, after trying to place the code on one line in /view/gallery.php It didn't do anything for me, so I went to /view/gallery-caption.php
From line 40 you need to place the code in this way
<div id="ngg-image-<?php echo $image->pid ?>" class="ngg-gallery-thumbnail-box" <?php echo $image->style ?> >
<div class="ngg-gallery-thumbnail" ><a href="<?php echo $image->imageURL ?>" title="<?php echo $image->description ?>" <?php echo $image->thumbcode ?> >
<?php if ( !$image->hidden ) { ?><img title="<?php echo $image->alttext ?>" alt="<?php echo $image->alttext ?>" src="<?php echo $image->thumbnailURL ?>" <?php echo $image->size ?> /><?php } ?></a><span><?php echo $image->caption ?></span>
</div>
</div>
Now it's back to normal, I guess the new wordpress is putting extra br for some reason under the image. I thought it might be helpful for someone.