There are non removable white space before and after the formula in the text.
In the document, I've got
TEXTTEXTTEXT FORMULA TEXTTEXTTEXT
These space are attached to the formula
and are not removable.
Platform (if different from the browser):
Browser: Mozilla/5.0 (Windows NT 5.2; WOW64; rv:10.0.1) Gecko/20100101 Firefox/10.0.1
And if you remove left/right padding from Object Properties, is the result sufficient?
It works for me. I close the bug (which is not :)).
The enhancement request to change the default space to 0cm is tracked in bug 65067, therefore close this.