The checkboxes there are controlling what's important to the comparison. Whitespace will be important if they're checked and unimportant if they're unchecked. They do only affect text that doesn't match something else in the grammar though. If you're comparing C++ code, for example, and the whitespace occurs at the end of a comment line it will be classified as a comment instead.
Assuming it's classified as "unimportant" correctly, BC will still show it as a difference, but will show it in blue rather than red. You can hide unimportant differences using the View->Ignore Unimportant Differences
menu item, which will make them appear using the matching coloring and filter as such.
If you're still having trouble you'll have better luck getting support if you email support@scootersoftware.com or post in our support forums at http://www.scootersoftware.com/vbulletin/ with a bit more information.