To change the size of the gap between the scrollbar and the coverflow items you may use the CenterOffsetY property of the CoverFlow control. To customize the navigation of the RadCoverFlow control you could set the NavigationPanelTemplate property that is a DataTemplate.
I would suggest you to take a look at the beta version of the new CoverFlow control that is based on the Silverlight 3 perspective projection. The RadCoverFlow control will no longer be supported after Q3 release, because the new one covers all its functionality. There are some diffrences in the API of the two version and one very important difference is that the new version doesn't support scrollbar, because Silverlight 3 supports ElementName in the binding expressions and it is easy to be implemented separately.