VS '10 resizing overruns objects...

[ShuckyD]

OK, so I have a VB project that was handed to me from another developer, it was created in Visual Studio 2010 and it has several different controls on FormMain such as tab controls, text boxes, labels and a menu strip. It had alot of extra space and could be easily shrunk to half the height. I went ahead and moved things around so they only take up the upper half of FormMain (1004,768px) and I want to bring the main form closer to the 500px height mark and typing it in there doesnt do it either.

Maybe I'm wrong or some controls are bound to others that I'm not aware of, but when I click on the handles at the bottom of the main form to drag it up the form gets smaller, but it also overuns and cramps other controls such as the tab control, textboxes, etc. It's not like I'm making the form smaller than it needs to be, but it looks like these objects are somehow connected (see screenshot for a partial view so you see what I mean).
Am I doing something wrong here, is there something I'm missing?