Version: (using KDE KDE 3.5.8) Installed from: SuSE RPMs ...so the current item (in the list) would be still visible.
While this may sound good in theory, that's not how almost all applications out there behave when you resize their window. The view stays anchored to the top left, and more UI will be revealed at the bottom right. If we were to interfere with that, that would be highly confusing and in most cases not what users expect. If at all, this would need to be changed in a systematic way across all apps (i.e. in the general interaction design, aka HIG). As a workaround moving focus or selection should bring the item back into the viewport after it was hidden.