You are looking in the correct file.
Look for a section of code preceded by "<!-- results listing -->" (or "// results listing", depending on Sphider version).
There will be a line containing "($title?$title:$sph_messages['Untitled'])". This is the code which decides to either print the title if it exists, or prints "Untitled" if the title is empty.
You would want some code which would either display the entry if title is not empty, or skip the entry and move on. Be aware that if you do this, there will be a mismatch in the number or results returned and the number of results actually displayed.
