This was a somewhat frustrating problem, aggravated by the fact that IE7 was also acting up.
I managed to fix IE7 by doing a windows repair install, but task manager would just show a portion of what it should.
The performance tab was the worst. Instead of showing 2 graphs (cpu and memory) and some memory statistics, it would just show the cpu graph, no other details, no tabs, no menu bar.
From this, it was impossible to move or resize task manager.
By using keyboard shortcuts, I managed to activate different tabs, and shut it down.
After discounting the possibility of an infection, I eventually stumbled across: http://www.pchell.com/support/taskmanager.shtml
All I had to do was double-click anywhere in the middle of the window (or a blank part of the “border”), to get task manager back to normal.
In order to activate this small footprint mode, just double click in the blank border part of the task manager window.
I cannot believe that I’ve never seen this, after many years of using task manager. It just goes to show that there is always room to learn something new.