I've experimented with the original method of embedding the window and after quite some time found a way to resize the window and also give the impression/(or even manage ^^) that the focus is correctly switched according to the mouse position and the status of the main form....
It uses some dirty tricks, but should works quite good (at least it does on my pc ^^)

ImprovedEmbeddedWindow.zip


get the C# wrapper:
for A7.85.4 and A8.30.4, Version 2.3.9
at http://acknexwrapper2.matthias-auer.net/ or visit the thread