I have empty space in my header that I cannot account for. (That is header, not head...)

Between the widget at the top which holds the header image and login, and the page menu... Check it out: http://www.theblogfarm.com/

Any idea how I can find and eliminate this space?

Use FireBug to examine the header area and look at each element in the widget area to see which is the culprit (hint: look at each widget and their elements)

Okay, I did that, it shows my widget area height. Is there any way to adjust or set the height on the custom widget?

did you look at the div's (like in the last widget)?

The only div's I have are in the last (right) widget, which are needed to align the table. See below...

Is there any way to achieve the same layout and eliminate the div?

<div align="right">
<table border="0" cellspacing="0" cellpadding="0">
<tr>
<td width="100%"><a href="/login/">login</a> | <a href="/login/?action=logout&amp;_wpnonce=8c6d206766">logout</a>
| <a href="/login_logout/?action=register">register</a> | <a href="/wp-admin/profile.php">profile</a></td>
</tr>
<tr>
<td>
<p align="right"><a href="http://www.facebook.com/TBFAdmin" target="_blank"><img src="/images/facebook.png"></a>&nbsp;<a href="http://www.twitter.com/theblogfarm" target="_blank"><img src="/images/twitter.png"></a>&nbsp;<a href="http://feeds.feedburner.com/http/wwwtheblogfarmcom" target="_blank"><img src="/images/rss.png" /></a></td>
</tr>
</table>
</div>

What is the CSS used by them?? Try shutting each css rule and see what happens (in firebug, clicking to the left of the tule will shut it off)