Problem with using the same theme that was used in WP 2.0 now being used in 3.1

I recently upgraded my WordPress from 2.9 to 3.1.1. When I upgraded it, a problem in my theme design showed. There is a space on top of the page. You can see it here – https://anthropology.rachelchaikof.com/

When you look at the site, you’ll see this gray space on top. This space did not exist prior to upgrading to WordPress 3.1.1. How can I get rid of the gray space?

Thank you!