I believe those are all null fields.
I am pretty sure Peter is correct in that they are null characters.
If you encounter a character that you are not familiar with and want to know more about, you can select it and look at the unicode value in the Info Panel:
A quick search in Google with this value should give you an ideea of what you are looking at.
I probably could have said it better. Those are waht you would see in a Data Merge document when one of the fields contains no data. I don't have XML experience, but by extrapolation I'm surmising that these would represent tags for which there is no data to include.
Thanks everyone for solving this mystery.. My "extra space" problem is probably due more to the paragraph return than the null fields, but thanks again for the advice, and the instructions on how to identify unknown characters. .