Not sure if you're using WPF, or Form Control, but in the Designer's Properties Pane, what are your MaxHeight, MaxWidth, MinHeight, and MinWidth Properties set to?
As I understand it, the PaletteSet.Size Property only controls the initial dimensions, and not necessarily the size after it's been modified by user (I could be wrong).
"How we think determines what we do, and what we do determines what we get."