This branch uses the gaps patch from: http://infra.in.zekjur.net/pipermail/i3-discuss/2012-November/001042.html
I have also included some minor fixes that, for me at least, makes it work perfectly.
Gap sizes are now set in the config file by adding:
gap_size 16
And the result: (click the image below to see a video of it in action)
Gaps and borders are hidden when there is only one window in the workspace
You can set gaps size in realtime
Each block's background in i3bar can be changed and there is nice transition between colors