Anyone have a cure for this Windows annoyance?
My taskbar is set to Always on Top and Autohide, but many programs fail to recognize it, or it fails to work properly. I like to stretch the taskbar to 2-high to have more room for displaying icons. However, when I do this, many programs (including IE and Office) fail to resize and/or the taskbar fails to hide properly. So I lose the status bar for the applications, as well as any side scroll bars. Try editing an Excel file when you can't scroll sideways past the first window!

I realize that if I drop the Autohide, and leave Always on top on, it causes the app windows to resize properly. It is aggravating that this has been a problem since Windows 95, but they keep adding bells and whistles instead of fixing things like this.

Notice that the taskbar does not go away like it should when the cursor is not hovering over it. Also, the bottom of the IE window is HIDDEN.

http://farm2.static.flickr.com/1379/1149967650_88e208cbc6_o.jpgI don't know about the propriety of answering my own question, but here is some new information I found in the Microsoft Knowledgebase.
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http://support.microsoft.com/kb/179363/en-us

This article was previously published under Q179363
SUMMARY
A taskbar automatically hides itself if a program sizes itself to cover the entire screen.

There is no programmatic way to change the Auto-Hide option (that is left up to the user by design), but if a program takes over the entire screen then it will automatically cover the taskbar.
MORE INFORMATION
To cover the taskbar, you must set the SIZE of the full-screen window explicitly. You cannot just maximize the window. A maximized window takes up the workspace area, which doesn't include the taskbar. -----------------------------------------------------------------
I tried this and it worked. I had to drop the task bar down to the grey line, then resize my IE window to take up the whole screen. When I resized my task bar, it worked properly. On top of that it also worked for other apps without me having to resize their windows, so maybe the taskbar just needed a kickstart to get back to working properly.

A similar article MAY explain why this happens under XP. NT code did not allow apps to take control of the whole window, so the taskbar autohide did not kick in.
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http://support.microsoft.com/kb/133226/en-us

This article was previously published under Q133226
SYMPTOMS
When you run a SLIDE show from PowerPoint for Windows 95, version 7.0, under Windows NT version 3.51, the Office shortcut bar is visible.

Furthermore, if you are running Windows NT using the Windows 95 shell, the Windows taskbar is also visible during a slide show.

If you choose to autohide the Windows taskbar and/or the Office shortcut bar, they still appear as thin gray lines along the edge of your screen.

CAUSE
When you run a PowerPoint slide show, PowerPoint tries to take control of the entire screen. Windows 95 allows PowerPoint to do so, so the Windows taskbar and Office shortcut bars are hidden during slide shows running on Windows 95. Windows NT, however, does not allow any APPLICATION to take total control of the entire screen, so the Windows taskbar and Office shortcut bar remain visible.