You can programmatically shrink the sections in the constructor after the InitializeComponent() call.
// Required for telerik Reporting designer support
.detail.Height = Unit.Cm(0.01);
This will make the section as high as the items inside.
the Telerik team
Q3’11 of Telerik Reporting is available for download. Register for the What's New in Data Tools webinar to see what's new and get a chance to WIN A FREE LICENSE!