This isn't exactly a new thread, but so far there haven't been any answers; so here goes.
Contrary to ancient custom, the taskbar/panel belongs on the side of the display with autohiding enabled. ;D
See for example http://www.tentpost.com/left-taskbar.png.
The taskbar in this snapshot is still too narrow (KDE3 limitation; MSWin allows much larger).
I've mostly achieved this with XFCE 4.4, but met a few problems. In order of decreasing significance, they are
- the panel's maximum width is way too small (IIRC 128 pixels)
- the taskbar averages the vertical space between the open applications (each should always occupy a single line)
- the desktop/window list button is HUGE (as are the XFCE menu and the show desktop button)
Thanks for any suggestions.
 This arrangement optimizes useful pixels since English text is horizontal. No reason for application text to be forced to share ~1k of horizontal pixels.
P.S. I'm seeking asylum from the KDE4 catastrophe.
I totally agree with your thoughts on where the taskbar should go on a screen - makes even more sense with today's wide-screen monitors. However, I prefer it on the right-hand side :-)
I too was disappointed with XFCE 4.4's Panel in vertical mode, and its "elastic" buttons, but haven't found a way to change it. Ideally, when vertical, I'd like the Panel to look much like the Windows taskbar (or maybe the old FvwmIconMan), with fixed-height buttons. It should really be fairly trivial to do this, but I'm currently too lacking in Copious Free Time to start hacking the XFCE source :-\. I guess it's too late now for a 4.6 feature request... :-(
Just out of curiosity, why do you need such a big panel? I have my panel on auto-hide too and its only 25px in width and on the top of the screen, if I pull it out it just covers the title-bar and gives me all I need, so why would you need so much space on a single panel (don't get me wrong, I'm just curious)?
"25px wide" is really "25px high" -- a line of text is 1 row by N cols... A panel on the side needs to be wider.
I like being able to see the difference between windows with long titles.
"App XYZ - Working on topic A"
"App XYZ - Working on topic B"
The MacOS/MSWin classic panel would truncate both of these to be the same (OSX requires a mouse hover to get the text).
I don't like insanely narrow taskbar buttons, truncated text, "group by application type" submenus, scroll buttons, or other kludges when the ~1600 pixels run out of space for each window's title. Just allocate more space, use it wisely, and keep it hidden by default. Since that creates so much empty panel space, there's now a good spot for putting the system monitor, world clock, calendar, toolbar of common apps, etc.
Another reason to put the panel on the side: fewer activation pixels. I have a habit of moving the mouse down out of the field of view -- unintended panel activation. Window decorations are usually at the top -- unintended panel activation. The sides are more "out of the way". The right side tends to have scrollbars -- unintended panel activation. Another reason for the panel on the left that I know exactly where to look (cursor/edge of the screen) when starting to read the panel text. For a right-to-left language, I think I'd prefer the panel on the right (and scrollbars on the left?).