I dont understand why such a large space is between each image,
(arent the images scaled down?) how can I get a 10-20px spacing betwwn each image in that list?
It's because you are scaling your images down with the transform property. If you remove the scaling on ".hovergallery img" it shows the proper size and spacing. It seems that when you scale down using transform it retains the image's original sizing. Not really sure why.