Comment 6 for bug 893347

OK I have found a semi-solution. I opened up /usr/share/gtkvncviewer/data/gtkvncviewer.glade in glade-gtk2 and I removed the viewport around the iconview and this gave somewhat better results. To do this:
* navigate to connectDialog->vbox1->frame1->vbox6->scrolledWindow2->viewports->iconview1
* right click on iconview1 and select remove parent
* save

This may also be relevant http://askubuntu.com/questions/124654/gtkiconview-doesnt-automatically-fill-the-space-with-icon-when-user-resizes-the