Ok, here is the new design for Pixe when clipped to be running in a 1024 x 768 mode (obviously this will be a little less normally due to the taskbar/window title):

As you can see, the main tools are now at the top, to the right of the palette. Why is this?
Well, this design is based on a theory of minimising mouse movements. Apart from the canvas the most important parts of the GUI are the palette and the main tools (IMHO), with brush preset sizes close behind. So, I reasoned that a good design would minimise the amount of mouse movement necessary between those elements. Accordingly I created 6 variant designs using Excel (as a kind of coloured graph paper designs) and analysed each one in terms of distance, feel, visual look and how much you had to overlap elements to reach gui parts.
Let me explain that last part again.. In the old design you had to move over the other tool icons to select draw, line, etc.. Not only that, but the commonest tools where both the furthest away and the elements where you had to 'reach past' other tools to select them the most. Psychologically I think this does have a negative effect compared to designs where you don't have to do that and it seems easier to select tools / buttons.
I tried making the tools vertically orientated to the right of the tool options section. Despite the narrowness this seemed to work ok, except that you had to move some distance to get from the top colour to the bottom tool. If I put the tools to the right of the colours then you have to overreach for every colour which seems wrong.
So, in the end although I would have liked the tools and tool options to be closer, this seems (currently) the best answer. The palette, tools and brushes are all oriented around the top-left corner so reducing the mouse movement and overreach. The most important tools are now at the bottom of the 8 x 2 tool panel (closest to the image), while the most important brushes are closest to the image too.
Also in terms of style, you can see I have refined the 3D look somewhat and reduced the strenght of the coloured title 'bars', while adding more text titles to add both space and clarity. The icons are now very slightly softer/rounded and I've added (what will be an optional) tool highlighing effect to indicate which tool option panel is open.
Also, you now have an optional x1, x2 or x3 image view in the palette when it's over the image, which helps with drawing.
The top right of the panel under layers will feature both layers, layer tools and multiple effect/paint/filter slots (at least 10) which you can use to store paint modes, etc..
The palette and options are not done, so this is something I will go back to, but I think I will have a less cluttered version than previously and put some of the options in a seperate colour options panel.