FAQ:

How can I get rid of the text in the toolbar?

Answer:

To change the settings for all GNOME applications, set the toolbar style to icons_only in the Menus & Toolbars capplet in Desktop Preferences.

If you don't use GNOME (ie you don't have gnome-setting-daemon running), you can use the following setting in your ~/.gtkrc-2.0

gtk-toolbar-style = GTK_TOOLBAR_ICONS
If you still think the toolbar is too large, you can make the icons smaller too, by adding this in the same place (i don't know if there's a gconf key for this anywhere):
gtk-toolbar-icon-size = GTK_ICON_SIZE_SMALL_TOOLBAR

By default Galeon follows the desktop preference, but you can also override the desktop preference for Galeon only, by setting the /apps/galeon/UI/Toolbar/toolbar_override_style GConf key to icons_only. For example, with gconftool you can use the following command line:

gconftool-2 --set --type=string /apps/galeon/UI/Toolbar/toolbar_override_style icons_only