Your website does not behave properly with all browsers because of the font used. Indian language fonts are mostly not as regular as latin fonts, and many of the symbols are supposed to be overlapping - one character might have to appear above or below another character, but should not leave take its space while rendering, This kind of font rendering is poorly handled in earlier browsers, that's why you have the problem with white spaces.
IE5 is certainly an old browser, for which we cannot make any patch-up or repair, and cannot guarantee that all features will work good. However, if you site is a public website you can expect most visitors to be using IE6 or above, so you should have less problems.
Another important matter to be taken care here is: You should try to avoid non-unicode fonts for websites, and use some of the available standard unicode fonts for your local language websites. This will help the site to get the proper font displayed automatically. For this you need to rewrite all your contents, but once done your content will become standard, and will get guaranteed proper exposure to search engines.