I think you should right-click the panel, select panel properties and see there (also accessible trough KDE Control Center I think). There should be an option to choose the panel size in pixels, and probably other stuff too.
I've had the impression that the size of the application "bars" in the menubar (length, maybe rows too?) depends on the amount of them: if you only have one application shown there, it takes some defined maximum area of the panel, and if you have 4 they share the size so that together they fill the space up. Enough applications and some of them may be grouped so that when you click on such an "application box" in the panel you get a list where you can select one of the grouped items..
Check panel properties, if it can be changed, it's probably there. Note that there are odd things in KDE that you need to work with to alter, for example turning automatic spell checking off isn't as easy as one might think -- at least in the versions up to 3.5 there is no configuration option anywhere that lets you disable the feature