I don't mean to make this a zombie thread but I found this via google search trying to do the same thing. I have another method that I just figured out which may work better for some. The next time someone finds this thread they'll have another way.
I have Go Launcher EX installed. I suspect other home launchers may have the same function as well. When you long press on an app you get the option to rename it. If you delete the name completely its totally blank. No space required.
I figured out this was better (for me) because my installed theme adds a backdrop to app icons but not widgets. The methods mentioned above act as a widget which opens an app therefore the theme on my apps wouldn't apply.
Example 1: apps on homepage, with theme backdrop, labels deleted for all except "camera"
Example 2: showing effect of long press on camera app icon.