Hey I don't know how different Pinnacle Studio 11 is from Avid but in Avid there's an area where you can choose to either have a Film Style layout or an OverWrite layout. If you choose the Film Style it keeps gaps but if you switch it to the OverWrite it changes it over. See if there's this kind of function in Pinnacle. If there is it will be right in between your two video windows. if not try downloading the manual (if you haven't already) and just search (control+F) close the gaps. You should get a message telling you how to do it.
Hope this helps,