Best way to manage whitespace between inline list items

Several options here, first I'll give you my normal practice when creating inline lists:

<ul id="navigation">
  <li><a href="#" title="">Home</a></li>
  <li><a href="#" title="">Home</a></li>
  <li><a href="#" title="">Home</a></li>
</ul>

Then the CSS to make it function as you intend:

#navigation li 
  {
    display: inline;
    list-style: none;
  }
#navigation li a, #navigation li a:link, #navigation li a:visited
  {
    display: block;
    padding: 2px 5px 2px 5px;
    float: left;
    margin: 0 5px 0 0;
  }

Obviously I left out the hover and active sets, but this creates a nice block level navigation, and is a very common method for doing this while still keeping with standards. /* remember to tweak to your liking, add color to the background, et cetera */

If you would like to keep it just with text and just inline, no block elements I believe you'd want to add:

   margin: 0 5px 0 0; /* that's, top 0, right 5px, bottom 0, left 0 */

Realizing you would like to REMOVE the whitespace, just adjust the margins/padding accordingly.

Another useful way to eliminate the whitespace is to set the list's font-size property to 0 and the list elements' one back to the required size.

What you really want is the CSS3 white-space-collapse: discard. But I'm not sure if any browsers actually support that property.

A couple alternative solutions is to let the tailing end of a tag consume the whitespace. For example:

<ul id="nav"
    ><li><a href="./">Home</a></li
    ><li><a href="/About">About</a></li
    ><li><a href="/Contact">Contact</a></li
></ul>

Another thing I've seen done is to use HTML comments to consume whitespace

<ul id="nav"><!--
    --><li><a href="./">Home</a></li><!--
    --><li><a href="/About">About</a></li><!--
    --><li><a href="/Contact">Contact</a></li><!--
--></ul>

See thismat's solution if you are okay using floats, and depending on the requirements you might need to add a trailing <li> that is set to clear: both;.

But the CSS3 property is probably the best theoretical way.