Dialog styling broken/weird in 7.x-1.x version

The Drupal 7 port from #491224: Port modalframe API to Drupal 7 is functionally working. :-)

However, there are a number of problems with styling that need to be addressed:

• Dialog chrome is kinda funny looking. :-) I know that really subjective, but I'd prefer if it was closer to the Drupal 6 version.
• The close button is stuck to the top of the title area, rather than being centered vertically.
• The title bar is grey text on a grey background and it's nearly impossible to read.
• There is excessive extra space at the bottom of the dialog.
• "Jump to Navigation" link is visible

Here is a screenshot to show what it looks like currently:

Marking as "critical" because it blocks making a stable release for Drupal 7. We need to look good at least in the default Drupal theme!