I think the problem is xrandr. I tried your script with a new RC8 and got the same thing under matchbox. Then tried "xrandr -s 1" and no resolution change. Try to test it under matchbox again and bugreport if you think it's some bug in the xrandr, too.
Zumi
Zumi: That's odd, my script works fine under matchbox for me. Under fvwm sometimes xrandr doesn't change the resolution. The pattern of this happening is irregular, when it does occur, the next time it runs it works fine. I can't seem to get it to repeat the problem with any regularity.
I'm really bummed that I can't mplayer to work fullscreen under fvwm I've installed perl to my SD and now have taviso's directory browsing scripts working so I can browse my mp3 and video directories from the menu and launch xmms or mplayer by selecting the file name, very sweet. (see attached screenshot)
Cheers,
Jerry