I have implemented this Feature Content Slider:
http://demo.webdeveloperplus.com/featured-content-slider/
There seems to be space between the Navigaion LIs and I cannot determine how to eliminate that space: The issue is on my development site: http://www.virtualpetstore.com/green.aspx
However in my JSFiddle workup, this appears fine- without any space:
http://jsfiddle.net/NinjaSk8ter/6WXkM/
Here is an illustration of the Issue:

The Yellow and Blue Divs are not causing this space.
Also, This 1px of bottom padding in featured ul.ui-tabs-nav li has nothing to do with that space:
#featured ul.ui-tabs-nav li{
padding:0 0 1px 15px;
color:#666;
/*background-color:red;*/
}
#featured{
width:546px;
position:relative;
border:2px solid #ccc;
height:260px;
/*height:255px;*/
background:#ffffff;
background:yellow;
}
#featured ul.ui-tabs-nav{
position:absolute;
list-style:none;
padding:0 0 0 0;
margin:0 0 0 368px;
width:178px;
/*height:255px;*/
height:245px;
background-color:blue;
}
#featured ul.ui-tabs-nav li{
padding:0 0 1px 15px; /*left is distance between pointer and lis*/
color:#666;
/*background-color:red;*/
}
#featured ul.ui-tabs-nav li img{
float:left;
margin:3px 2px 0 3px;
padding:1px;
border:1px solid #080808;
/*background:olive;*/
}
#featured ul.ui-tabs-nav li span{
font-size:8px; /*font size of text nav li boxes*/
padding:0;
}
#featured li.ui-tabs-nav-item a {
display: block;
/*height: 59px;*/
height:60px; /*height of nav li boxes*/
font-family:Verdana;
color:#333;
background:#fff;
line-height:9px; /*distance between anchor tag text*/
/*text-decoration:none;*/
}
#featured li.ui-tabs-nav-item a:hover{
background:#f2f2f2;
}
#featured li.ui-tabs-selected{
background:url("/images/Green/GreenSlider/selected-item.gif") top left no-repeat;
}
#featured ul.ui-tabs-nav li.ui-tabs-selected a{
background-color:#CCCCCC;
}
#featured .ui-tabs-panel{
width:368px;
height:255px;
position:relative;
/*background-color:orange;*/
}
#featured .ui-tabs-panel .info{
position:absolute;
top:209px;
height:46px;
background: url("/images/Green/GreenSlider/transparent-bg.png");
}
#featured .info h2{
font-size:13px;
font-family:verdana;
color:#FFFFFF;
padding:3px 0 0 4px;
overflow:hidden;
}
#featured .info p{
margin:0 0 0 5px;
font-family:Arial;
font-size:12px;
line-height:13px;
color:#f0f0f0;
}
#featured .info a{
text-decoration:none;
color:#fff;
}
#featured .info a:hover{
text-decoration:underline;
}
#featured .ui-tabs-hide{
display:none;
}
Looking in Firebug, you need to remove this CSS (on line 484):
Or, if you need that for something else (which seems likely), you can alternatively solve this by adding: