I also have this problem with Glaze on my home machine, but not my work machine. Both run XP but my home machine has dual monitors. Disabling the second monitor makes no difference though. The problem isn't consistent either. Sometimes IE is 20 pixels low, other times it's not. Because it's inconsistent I have bothered to try and narrow the cause to a specific module.

Actually I wonder if it might be related to user switching. My partner runs the normal Explorer shell so I wonder if IE gets confused when we a both logged in.