not sure what you mean by putting it in a loop. It works and does not slow the board down or anything. So is this a problem?
the extra space comes from haveing the 1x1 gif there. I dod not have anything under where that images is show, so it is not a problem.
As for the 100 by 100. It is generally used to shrink images if people are using one too large. I suggest in the profile text that people use an image that is already 100 by 100 that way the sizing will not mess it up.