Another thought, are you running any software that might relate to the monitor that does zoning or any other related handling? Also are they aligned side-by-side in the monitor preferences or one above each other or any other type of alignment ?
No, I don't use any kind of desktop layout modification software, just a regular nVidia drivers. See attached screenshot - it shows both my desktop layout setup and the offset WACUP window.
Possible hint 1: You can see that I use negative vertical offset of the secondary/WACUP display by default (it's offset by -160 points vertically). If I change the offset in the nVidia control panel to +160 points while WACUP is running, WACUP window can be suddently expanded to the full 1200x1600 resolution. However once I restart WACUP, its window gets shrunk to 1200x1440 again. Or more precisely, immediately after WACUP restarts, it's window appears to be expanded to the correct resolution of 1200x1600 for a split second, but shrinks almost immediately to 1200x1440. I can duplicate exactly the same behavior going from the possitive offset to negative one. As I mentioned before, similiar temporary workaround effect can be achieved when I adjust Window Settings -> Scaling to e.g. 125% and then shrink it back to 100% again.
Possible hint 2: Winamp v5.8 Build 3660 does not exhibit this problem. It goes straight to 1200x1600 every time.