double check those settings, maybe somethign is mismatched - odd that it's greyed out. as if it thinks it's in full screen mode.
an aside:
in window mode you can actually have a larger viewing area if you drag the window so that the top portion is partially off the screen. the, stretch the lower corners.
fullscreen: problems? if not, then it's a viable option. in general, you get better use of resources in a windowed mode, though. but, maybe that's a dated concept.
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