Hi
It's difficult without seeing an example e.g. A screenshot of the timeline with the gap showing in relation to the other tracks, to give advice. Is there for example a lower track with a clip on that prevents the gap closing? . Have you tried just adding a clip to an empty timeline, creating a gap and then tried closing this? i.e. doing a simple test.
It's a rather old version of VP. that you look to be using though. Things have moved on a lot since that version came out. You might be better off with the latest version 5.20. Give it a try......
Keep your current version setup files (the vppsetup.exe file) and download the latest from the list of NCH products here... http://www.nchsoftware.com/download/index.html
Nat