They use a background image repeated across in a div, then the logo and stuff is actually above that. I can't find the body tag in their css (there's a lot of css), but it would have the margins set to zero, not the padding. Browsers have their own margins for the body, which is usually 15 px I think. It will vary among browsers though. That's where your space is coming from.
EDIT:::
I found the body css-
body.login-body {
background-color: #f5f5f5;
color: #000000;
font-family: Arial, verdana, Helvetica, sans-serif;
font-size: 12px;
margin: 0;
line-height: 1;
min-width: 680px;
height: auto !important;
height: 1%;
}