(Karmic) -
The minimum width of the panel is determined at runtime , considering application font.
So overcome this with
1.A separate font property for panel
2. This should automatically resize on resizing panel
3. Add supports to applets to have a reduced size
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( Temporary workaround based on above observation)
1.Open System > Preferences > Appearance ( or right click on desktop and select 'Change Desktop Background ) select 'Fonts' Tab
2.Change the 'Application font' size to '9' ( setting the font size to 8 can reduce the panel size to 19 )
3.Right click on an existing panel and click 'new panel '
4.Right click on the new panel and set 'Orientation ' to 'Top' and change size to 21 ( Don't check 'Show hide buttons '
5.Now the panel size changes to 21 . Add applets to it
Disadvantages :
1.An existing panel with applets may fail to resize ( so add applets only after resizing ) or panel with the 'Hide' buttons ( Ubuntu had to fix this )
2.The fonts of other application also changed - a side effect. - workaround – Ubuntu had to implement a separate font property for the panel ( eg : inside the panel's property dialogue ) or had to adjust the font size according to panel height automatically .