This is likely to be caused by the CSS on your web page rather than by TiltViewer itself.

TiltViewer can be embedded into a #flashcontent <div> of any aspect ratio you like.
Try the following. Take the sample gallery from the TiltViewer download package as a starting point. Open the 'index.html' page in a plain text editor.
Change:

    #flashcontent {
        height: 100%;
    }

.. to:

    #flashcontent {
        height: 400px;
        width: 800px;
    }

... and change the body's background's color from black (#000000) to white (#ffffff) so that you can see the edges of the gallery.
Open 'index.html' in a browser to view the gallery and you will see that the gallery's aspect ratio is rectangular (rather than square) and that the gallery itself goes all the way to the edges of the Flash stage (as can be seen when clicking on an image to enlarge it).

Try setting your #flashcontent <div>'s dimensions in absolute pixel values (rather than as percentages) and temporarily change the color of each <div> in your own page to see where the extra space is coming from.

If you wish the images to appear larger in the gallery when zoomed out, then you would need to purchase TiltViewer-Pro and decrease the zoomedOutDistance Pro Option: http://www.simpleviewer.net/tiltviewer/ … s.html#pro
The default value is 7500. For example, you could try:

fo.addVariable("zoomedOutDistance", "5000"); 

I'm still unsure what space you are referring to.

Do you mean the zoomed-in size (where a large zoomed-in image can be seen at the very edges of the Flash stage)?
Are you referring to the space between the top of the uppermost row of images (when zoomed-out) and the top edge of the Flash stage (and similarly at the bottom of the gallery)? If so, then changing the zoomedOutDistance is the solution. If not, then perhaps you could upload a screenshot somewhere showing the space to which you refer. Thank you.