Having similar problems with CentOS 5.3 guest (kernel 2.6.18-128.4.1.el5, all software up to date as of 8/20/2009) in VirtualBox 3.0.4 running under CentOS 5.3 host, on a Dell tower with 1920x1080 LCD monitor. Installed 3.0.4 guest additions, /var/log/vboxadd-install.log wraps up with
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DKMS: install Completed.
Installing the Guest Additions kernel module system service.
Installing the shared folder system service.
Installing the Guest Additions service.
Installing the VBoxControl command line interface.
Installing the X Window System user service.
install_x11_startup_app(): dest is vboxclient.desktop
install_x11_startup_app(): executing install -m 0644 vboxclient.desktop /etc/xdg
/autostart/vboxclient.desktop
install_x11_startup_app(): executing install -m 0755 98vboxadd-xclient /etc/X11/
xinit/xinitrc.d/98vboxadd-xclient.sh
Creating udev rule for the Guest Additions kernel module.
Installing the X Window System drivers
Installing Xorg 7.1 modules
Successfully completed.
Shared folder works, mouse integration works, but dynamic resizing of the screen does NOT work, not even after following Sasquatch's sage advice, to the letter, on repeated trials--it's 1024x768, period.
If I resort to specifying resolutions, either by using system-config-display or manual editing of xorg.config, the best I can get out of this thing is 1280x800. Allowing for the toolbars at the top and bottom of the host's display, and the space taken up by VirtualBox's own drag bar, tool bar, and status bar, I would have expected it to handle 1440x900. Attempts to allocate areas larger than 1280x800 to the display either revert to the original 1024x768, or give me a viewport onto a larger scrollable desktop (shades of AmigaDos when the old Commodore color monitor's limited resolution was outpaced by the amount of RAM one could allocate to the desktop . . .). When that happens, I can see the full horizontal extent of the guest's desktop, but the top is clipped. If I run the mouse pointer up to the top of the viewport, the guest's desktop "scrolls" down in intermittent, jerky fashion, over the course of many seconds, until the top edge of the guest's desktop is reached. If I drag the cusor down to the bottom of the viewport, the guest's desktop scrolls jerkily upward until its bottom edge appears.
When the virtual machine boots, the mouse pointer sometimes appears as two arrows, separated by a vertical displacement that is proportional to the vertical distance from the top of the virtual machine's desktop--that is, the separation between the two images increases if I drag the cursor down, and decreases if I move it up. This double cursor phenomenon occurs only if I have used system-config-display or xorg.config to specify a screen resolution larger than 1024x768.
Video memory doesn't seem to matter--happens with 12 MB, 64 MB, 128 MB.