Well, I'd say the problem is you didn't spend enough time memorizing the menus so you would have a workaround.
Is the missing space just black/white/whatever? Is more fight background in its place? I know nothing about PSX emulators, but have you checked all the layer options (like ZSNES possesses) and other filters? Have you checked other video drivers to see if the problem persists? You may also need an later model BIOS for compatibility with epsxe.
Any other PCs that you can test the same setup on?