I've been working with Vanilla and now have a new site up at: http://orthodoxchicago.org. It's a nice script - very smooth, though I have hacked it a bit. (added feeds, email notification, changed bugreports to a contact form, etc.)
Yeah, I noticed the problem. With IE, there's a slight bulge in the header too. Someday I'll fix it, but right now it's on the backburner. About the RSS feed, I just ran the Atom one through Feedburner.com. It's a great (and free) service that let's you translate feed formats and caputure statistics as well.
I've been trying to use http://www.kbcafe.com/rss/rss2smtp.aspx for email notification, but haven't gotten it to work yet. We'll see if I can't get it going.
i like the approach of letting services do things for you....(like i use flickr and never will install an image uploading application for any of my websites ever again) :D