On Windows 7 with Visual Studio 2008 and VAX 1833 I am getting a scrollbar that obscures some of the text. See the attached image.
My guess is that the problem is caused by a miscalculation of the listbox size because of the different window or font metrics.
Prior to that I've been using VAX 1727 with VS 2008 on Vista and the listbox works just fine. So I don't know if the switch to the new VAX or the switch to Windows 7 is to blame here.
BTW, with VS 2010 I get a thin listbox border even without the registry setting. With the registry setting the listbox gets all weird. Try it