Can I stop my window manager from covering the panel?

The filer asks the WM to not cover a few pixels at the edge of the screen. When you move the pointer over the edge of the screen, the panel
comes to the front. If this doesn't work, try a different window manager (works fine with XFWM4).
XFWM4 also lets you configure the desktop margins, which you can use to stop windows going too near the edge of the screen.
Some window managers, such as sawfish, also allow you to mark certain windows with the avoid flag to stop them from being covered at all.