OK, I figured out a hack. I created my own track info template, by copying the Dirt Simple one. Now my cover art of the playing track is displayed in the Display Pane without the gap...
In case you care, which I'm sure you don't: create a folder in this directory, called 'Simple':
C:\Program Files\Media Center\Visualizations\Track Info\
In this dir, create a file called index.html. Paste the following code:
<html>
<head>
<title>New Page 1</title>
</head>
<body bgcolor="#000000">
<div align="center">
<center>
<table border="0" cellpadding="0" cellspacing="0">
<tr>
<td width="100%" align="center"><font face="Arial">
<img border="0" src="TRACKINFO_INSERT_IMAGE" width="120" height="120">
</td>
</tr>
</table>
</center>
</div>
</body>
</html>
Now in the Display Pane, choose Track Info and then Simple.
The html code is easy to tweak for different Display Pane sizes, if you want to make the Cover Art bigger (change height= and width= in the img tag). I always have mine the same, quite small, so I can see 40 or so entries in the Playing Now queue.
-Matt
Listening to: 'Pensando en mi Vida' from 'Street Signs' by 'Ozomatli' on Media Center 10