In WordPress, there are many functions which output things for you. For example, wp_list_pages() outputs a list of all your published pages. The HTML markup it spits out is pretty nicely formatted (meaning: has line breaks and indenting).
There are some circumstances where all that "whitespace" in the formatting is undesirable. Like 1) it's all the more characters to deliver and 2) closing "the gap" in older versions of IE.
If the function supports a way to return a string (rather than immediately echo it), you can use a regex to remove the space:
<?php echo preg_replace('/>\s+</m', '><', wp_list_pages('echo=0')); ?>