When I tried fullscreen, at 1680x1050 with 104x65 grid, curses_square_16x16.bmp and [BLACK_SPACE:YES], the following issues arose:
1) On the embark screens, text appeared a little stretched, withouut black space at the edges; however, this could just be my inexperience with the 16x16 bitmap and not NOTICING enough black space...
2)...however, a more serious issue happened when I tried to alt-tab out of fullscreen. It did not draw the screen for another window, but kept Dwarf Fortress covering the whole screen, and I could neither see other windows nor interact with Dwarf Fortress. I tried to tab back into DF, but it would not re-focus on it. Most serious of all, I tried Ctrl-Alt-Del to try to bring up the Task Manager, and even that failed to display; I was forced to do a hard reset since I could neither regain control of Dwarf Fortress nor end it. There did appear to be some interactions in the background; every press of Ctrl-Alt-Del yielded a momentary hourglass on the cursor (which appeared when I first tabbed out). I am not 100% familiar with the Task Manager behavior of Windows XP, since I was used to Windows 2000 for more than a year when I switched to XP, so I would have not been able to End Task on Dwarf Fortress blind like that.
The issues all happened in the embark screen, specifically when trying to use the add-new-item menu. Specifically, I was trying to tab into the wiki because I'd forgotten whether bituminous coal or lignite yielded more fuel, having browsed into the stone menu after +ing my way to hundreds of tower-cap logs.