Aha! This is what happens when I don't follow up with my own threads when I eventually answer them myself. I recall fixing the problem but since that was 10 months ago I can't recall the specifics of the solution.
Here is what I vaguely recall trying. First, I believe after I made my last post, I actually attempted uninstalling and reinstalling the .NET 1.1 framework. CurrentIy, Ialso see in my list of installed applications that I have .NET Framework 1.1 Hotfix (KB928366) installed. I'm not sure if this was part of an automatic Windows update of if I found it some how and that solved the problem. If you don't have it, you might want to give that a try.
This was also only an issue for me in the Windows Form Designer that is within VS 2005. If I opened a form, saved it (without changing anything), closed it and reopened it the controls would be resized-- usually the height value would be less than it was initially set as. I know I messed around with the dock settings for some of my container controls and tweaked the initial sizes. That might have helped.
One other thing that you could check for, although it wasn't part of my problem, is to see if you've accidentally set the forms "Locked" property.
If the form is locked, it is possible that there is a bug in the designer/.NET framework that is affecting the size of your controls. I, personally, have never used the "Locked" Property-- I typically use the MaximumSize and MinimumSize values to lock the size of a Form.
Hope that helps.