If this is a Windowblinds skin, you can open it in SkinStudio and change the Start Panel width, probably needs reducing about 10 pixels. In SkinStudio navigate to Start panel > User Pane in the left window, then in the right window select 'Size of the user pane' and reduce the width. You can then save and apply to see the changes.

looks like you went the wrong way

*you're

Anywho.  Try just narrowing the width of the right start menu panel by about 10 pixels.  (after you move the full width back to its original number.)

You need to change the text margins...not the size of the panel.

that didnt work either. It just made the application icons small.

No, I don't want the icons. I just want it to look like Jemaho's screenshot.

I had the same problem with a similar skin.
Notice that in your first picture, your "white" boxes where the programs are listed are in line with each other. In the second picture you can tell that you adjusted the wrong settings because those white areas are not in line anymore.
So, once you have changed that to the original, do the following:
Change your "Places" (i.e. dark region) margins. More specifically, you need to change the "text" or "content" margins for the "Places" box so that on the left side you have a more positive value. Do a noticeable change of 20 pixels or so and see how that affects it. I hope that does it for you.