Or check out intarsia. It sounds like you should be twisting your two colors where they meet, as you would in intarsia. Basically hold the yarn that you've been using over to the left and bring the new yarn from under and knit with it. Do this each row and they will twist themselves together and avoid that gap.
"Trust the pattern!"
Time flies like an arrow, but fruit flies like a banana.
Hop aboard while we follow the cloud-covered van of knitting harmony, man!! Woooo!! --Hedgehog
IngridKH on Ravelry