I have a feeling that there is something wrong in general with Mathematica's way of dealing with margins and spaces among/around objects in Graphics, Grid-s, and alike. This is a constant problem for me, and for many others I assume. I usually end up to do some pixel-pushing or other workarounds, but this is getting more and more annoying with every year. Consider the following example:
Panel[
Graphics[{Circle[]},
ImageSize -> 300, ImageMargins -> 0, ImagePadding -> 0,
Frame -> True, FrameTicks -> None, PlotRange -> {{-1, 1}, {-1, 1}},
PlotRangePadding -> 0, Background -> White,
Method -> {"ShrinkWrap" -> True}],
FrameMargins -> 0, ImageMargins -> 0, ImageSize -> All,
Background -> Lighter[Pink, .6]]

I have two questions related to the code above:
Q1: How to get rid of the pink frame margin without setting Panel's FrameMargins explicitly to a negative number? I would assume, a zero-width margin is ... zero-width.
Q2: Why does the left right and bottom part of the Frame of the internal Graphics disappear and how can I prevent it?
Edit
Various workarounds can be used, e.g. Pane or Framed. The problem with these is that they don't have the look and feel Panel provides:
CreateDialog[Pane[{1, 2, 3}], WindowTitle -> "Pane"];
CreateDialog[Framed@Pane[{1, 2, 3}], WindowTitle -> "Framed Pane"];
CreateDialog[Panel[{1, 2, 3}], WindowTitle -> "Panel"];
While Panel looks good in a dialog window, the other two do not.






PaneandFramedlook just likePanel; e.g. you can setBaseStyle->"Panel"andFrameStyle->GrayLevel[.7]etc to get the same looks. But I think the real advantage ofPanelis itsDeployedoption whichPaneandFrameddoes not support. – kglr Feb 03 '12 at 12:59BaseStyle -> "Panel". I think theDeployedoption can be substituted by aDeploywrapper. Now I already suggested to @Szabolcs to make an answer out of his comment but I wish you two would couple up and write an answer combining both of your comments :) – István Zachar Feb 03 '12 at 13:12Deployto the same effect. I think @Szabolc's comment explains the puzzling behavior for us all. – kglr Feb 03 '12 at 15:11