In XP, Vista, and Windows 7 you can adjust the size of the various window decorations.
In Windows 7, the menu to do so is slightly hidden. Right-click on the desktop, to get
Then select Personalize -> Window Color -> Advanced appearance settings..., to get
Update:
As an example, you can reduce the title bar height to 5 pixels, as shown in the snapshot below. I haven't yet discovered how to reduce it to 0 pixels, as requested by the OP. This change also affects parts of the taskbar, which may be a downside.