tbrantley, the horse is hollow backed in the photo. I don't know as much about racking horses, as I don't let my horse rack, but in a runwalk or flatwalk there are two sides to the rounding, the front and the back.
You need to be having the horse moving out from the rear (leg motivation) while holding him steady in the front ...my instructor explained is as 4 doors on a horse, you open the back door and close the front, when you want to sidepass or turn you close one side and open the other with your legs and hands etc etc
So if you want collection and roundness, you open the back door by motivationg your horse forward from the rear and keep the front door closed so their movement and power is out of the back end...in these gaited breeds back end is really important, racking or not, but the whole horse needs to be worked ...it's not about holding them back with a heavy hand in the front, but asking them to maintin their front end where it is at while moving out in the rear....the dropping of the head by rein aid techniquie can help, but some horses just set themselves up and dont need it. My mare does it on her own now that she understands because that is comfortable for her and she has developed her muscles properly so when i engage her rear she automatically sets her head and gets her power from the back rather than going strung out.
It can be really confusing to understand, and I wont pretend I know racking horses, as it may be different, but a horse is a horse and if he has his head up the way he does you're bound to get hollow back if you do not at least practice cantering and other rounding gaits. Like G said in another post, you can avoid having the head set and getting hollow back for stargazers by doing other gaits that use roundness ie canter, circles, backing up a lot...