From the rules (p. 4, 3rd column, 4th bullet): If you end your movement in a space with no adventure counters or towns, you skip the adventure and market steps.

Since you encounter other heroes in the adventure step, by the rules as written you can only encounter other heroes in towns or spaces with adventure counters.

My group has always played that you can encounter other heroes in any space (I think I missed that rule), regardless of its contents. How does your group play?

I would allow heroes to encounter one another in an otherwise empty space, for sure. Think of each hero as a traveling adventure jewel that only ever draws one card. =)

Of course, we don't really go out of our way to bump into each other when we play, so I don't think the issue has ever been raised directly in our games.