Well, I after
MANY hour of screwing with UL & many many resets I have figured out that if I totally eliminate the bottom row of icons that UL works fine. That's not a great solution & shouldn't be necessary (I never had to do that in WM 6.0) but it does work.
I unhid the systray & loaded 12 icons there & then added the GPS toggle in place of the bottom row of icons.
http://www.pbase.com/jmorton10/image/103337828
~John