The best way to change the frame size is using the default-frame-plist 
variable.  You can either use setq or customize.  Whenever a new frame 
is created, any properties in that list are applied.  You want to set 
height and width, which are in characters, not pixels.  I have (setq 
default-frame-plist '(width 80 height 45)) in my startup file, although 
it's probably better to use customize.

There are functions set-frame-pixel-height and set-frame-displayable-
pixel-height but they don't make the frame window the exact size you 
specify.  This is probably due to internal and window manager borders, 
and rounding off to character sizes.

None of this fixes the actual bug of course, but you should be able to 
configure XEmacs to occupy the entire screen space.

What I am trying to do is to fill the whole usable screen on a netbook.
So I set .Xdefaults XEmacs*EmacsFrame.geometry to something larger than
screen size. Xemacs starts, filling the whole screen, then as
.xemacs/custom.el is evaluated it redisplays toolbar in a different
place. Next the window is made smaller by the space the toolbar did
originally ocupy and still much smaller than the specified .Xdefaults
property.
On a netbook the wasted screen space is quite noticeable and the same
happens when toolbar is disabled completely.

This behaviour defeats even the maximus window manager utility that is
supposed to maximise windows by defaults on netbooks.

Are there better ways to set window size than .Xdefaults?