Did you change any system settings for fonts (like DPI)? Changed any Qt configs? There was a mentioning about this on the forums before, use the search (or google) to find that topic. I don't remember if there was a fix or not.
I had not made any changes to the font size/DPI in Qt.
So I installed package qt4-qtconfig and ran qtconfig and changed the font size from 13 point to 10 point. That seems to have restored VBox to exactly how it used to look in V1.x.
I presume that the defaults for font size/DPI have changed between Qt3 and Qt4?
Maybe I should take this back to Ubuntu.
Thanks for the suggestion it might have been something in Qt - I noticed Qt4 had been installed when I installed VBox 2 but I hadn't considered that might be the issue.