Ok, to answer some questions:
First of all, I just installed a brand new video card yesterday. I upgraded from a GeForce 2 to a GeForce 4 Ti4200 128MB card. That didn't change anything.
My entire system specs: PIII OC'd to 900 mHz (from 800 mHz), Asus P3V133 mobo, 256 MB PC-133 RAM, GeForce 4 mentioned above, Turtle Beach Montego Quadzilla soundcard, and a Linksys 10/100 ethernet card.
I have OfficeXP, but as far as I know, any and all toolbars are turned off.
On another note, the mouse cursor can go up into this dead space, but nothing else. Very peculiar. I'm starting to think the only way to solve this problem is to reformat and do a fresh install - I've just been trying to see if there was some other way around this problem, and what caused it in the first place.
Another thing that just came to mind - once in a while, when a window locks up and I have to alt-ctrl-del to "end process", it will get rid of this mysterious deadspace. I just did a quick test and I shut down "explorer.exe" and then restarted it and it got rid of the problem. However, I don't want to have to do this all the time in order to fix it.
Does that help anyone any?