hmm...works for me ( i get no control box ). Form2's ctor doesn't set its size to be maximized does it...?
from the msdn help for Form.ControlBox:
Note When set to false, the ControlBox property has no effect on a Multiple Document Interface (MDI) child form that is displayed maximized at time of creation.
this is on vs.net 1.1, i haven't tried on v 1.0 of the framework...