The reason that’s happening is because your images are all different sizes. Notice on the demo – http://demo.appfinite.net/legacy/ this doesn’t happen because they are all the same width and height. So I would upload images that are all the same size and then everything should show up properly. The slider is designed to only use one specific width and height, and when you have images that don’t show up consistently with the exact height there will be extra space left over.
You may also want to download and run a plugin called Regenerate Thumbnails so it will go through and adjust all of your images to the size you have configured in your settings. Do this everytime you adjust your width in the settings.