To change the space between items:
When the Grid Snap option on the View menu is enabled, the amount of space between each item instance must be at least as large as the distance between snap points defined for the current grid.
If you are working in character cell ruler units, the amount of space between item instances must be at least as large as the height of a single cell. Thus, to increase the space between records in a 5 record item, you must drag the appropriate spacing handle up or down at least four character cells--one cell for each space between item instances.