sounds like a science fiction. or perharps i dont have detailed explanation.
'Tracking' is just using a motor or something to aim the panels at the sun, so they generate more power.
Simon, I think there are a number of issues to look at with tracking. You probably need to look at what is the most cost effective means of generating the amount of power you require - adding tracking, or simply getting more panels. There is both the cost of the tracking hardware, and the energy 'wasted' in running it - both of these will probably be proportionally greater with a small system.
Then there is the issue of reliability - you take something with high inherent reliability, and introduce moving parts, with the potential for breakdowns. Regarding the spacing, most systems mount all of the panels on a large frame, which moves as a unit. This obviously has to be designed to withstand high winds, etc.
I think it only really makes sense when the installed cost of the panels is very high (space stations etc), or where the installation needs to be compact.
How is your MPPT design going? I have found an article for a simple analogue design I can send you if you like.