Small categories bar glitch

On my website after viewing the grandchildren categories there is a blank box that is visible when viewing the children categories, I know its a tiny bug, but I would really like to fix it. See picture

Also I want to replace the standard search bar with a Google AdSense bar. I've tried to figure out how to do it by reading forums but I can't comprehend what I read, can someone explain it simply or possibly tell me a plug-in that can do it for me?

Thanks so much for the help.