You might be able to either reduce the top and bottom text margins on the "Quicklaunch icon buttons", and/or increase the text margins on the "Buttons". You would tinker with those on SkinStudio's "Text" tab at the bottom of the screen. Changing the margins on the "Painting" tab will not do what you're trying to do, if that's what you've been changing.
Otherwise, depending on the blind, the "Buttons" images may have blank space built into them which you would have to crop out with an image editor. If you do that, you'd want to change both the painting margins and text margins to keep in line with the amount you've cropped off.
