Maybe I'm not completely understanding the problem, but I don't think the example you showed has anything to do with whether or not a search engine displays your title. As long as the tags are correct, the inclusion of space between html tags doesn't have any effect on whether or not they are read. Some designers (especially ones that like to use html editors like GoLive) insert a ton of space between tags while others write the code with very few spaces.
Another common practice with regards to SEO is code crunching. This involes removing all possible spaces between tags in order to improve download time and make the code a bit harder for snooping competitors to read. When this is done, your code goes from looking like this:
I've never seen any browser or spider have a problem reading code like this.
Also I'm curious how you were able to verify that the correction you made has caused search engines to now display your titles properly. Since your first post was yesterday, it doesn't seem that enough time has passed for any changes you've made to show up in a search engine.
Can you provide us with a bit more info?