It took way too long but I found a solution for the xpanel kiosk mode bug.
I was having a weird issue with 'phantom' button clicks when it was in kiosk mode. The problem went away if I put it in full-screen.
After some tinkering and google-ing the problem here are the new xpanel.ini settings.

• left=-4
• top=-50
• right=1028
• bottom-772

That completely fills the screen at 1024x768