Dude, time to learn some xhtml and css, this is pretty basic stuff. Monkeyman and Jizzlobber nailed it, simply adjust your css.
I don't think it's the titles that are causing you the problem of too much space between each pict though. It might just be the banners you've stuck between every single image. I'd try reducing their frequency to one every three images. As it is now, it reeks of desperation and makes the site unatractive.
If I was doing this I would leave the headers as is, move the caption to below the title and move category/comments stuff below each pic, reduce the frequecy of banners to one for every three or more pics, and play with your margins between all the elements until you are happy with it. Keep in mind that there is nothing wrong with some whitespace.
Oh, and remove the pimply ass on page 2. No one needs to see that shit.
Good luck.