Exactly. In fact I think it will make sense, instead of small/medium/large/huge, to have two modes: horizontal and vertical. In horizontal mode, there may be only horizontal scrolling if any, and the swatches would reflow and squeeze to fit exactly the allocated vertical space. In vertical mode, correspondingly, only vertical scrollbar may be present. And if there is more space than necessary for the current amount of swatches require, they grow to fit exactly. In other words, I want to control the size of the swatches by resizing the palette, not by choosing some predefined size, and I only want to choose the direction in which I will scroll if the swatches don't fit even at the minimum size. Can you do that?
I totally agree - and to control everything, you may choose the number of lines (horizontal) or columns (vertical) like in gimp. and forget what i said about borders, it actually looks nice ;-)