XP Taskbar covers popup text

For a few days now I've been noticing a problem with my WinXP taskbar. The taskbar is forcing itself to the top of the Z-order, so it is always on top. Now, this wouldn't normally be a problem. I don't use the auto-hide feature, so it's not a big deal to have the taskbar always visible. However, with the taskbar at the top most visible layer, stuff like popup text is covered up by the taskbar.

If I hover my mouse pointer over the Messenger icon, I expect it to show me a little box indicating my login status. I can kind of make out that there is a box being displayed, but since the taskbar covers the box, I can't read the text at all. All context sensitive text bubbles are unreadable.

I tried auto-minimizing the bar, but since I can only hover my mouse over the icon when the taskbar is shown, that is not a solution.

I can drag the taskbar to the sides of the screen, and that seems to fix the problem, but I don't like having the taskbar all the way over there.

Microsoft is patching a bunch of things today. I wonder if this is something they broke earlier and will fix in this update. I can only wait and see.