Mark,
The DOS compatibility window is sized to 625x450 pixels in order to match the typical DOS screen in which the application ran previously. You can resize it, if you like, using SetPanelSize and passing it the handle returned by the DOSCompatWindow function.
However, what we recommend is that you not even use this function at all. All you have to do is remove the calls to DOSCompatWindow, and then pass 0 as the first parameter to NewPanel or LoadPanel.
Luis
NI