If you are using Visual Editor for Post:
You need to enter the [wptab] shortcode for each tab in a new line
i.e.
[wptab name="Test1"] Content here [/wptab]
[wptab name="Test2"] Content here [/wptab]
[end_wptabset]
If you are using "Text"/"HTML" editor:
Separate the [wptab] shortcodes with two lines:
[wptab name="Test1"] Content here [/wptab]
[wptab name="Test2"] Content here [/wptab]
[end_wptabset]
Btw, there is an easy Quicktag in version 1.4, it should add the shortcodes as needed.
If the whitespace still shows up, plz post the url.