Here is a quick way to minify Magento HTML output of your website
In magento root folder open lib/Zend/Controller/Response/Abstract.php find out function outputBody and replace the code
$body = implode('', $this->_body); echo $body
with
$body = implode('', $this->_body); $body = preg_replace('~>\s+<~', '><', $body); echo $body;