VLC's auto resize to video size can resize to more than the monitors resolution, this will result in part of VLC's window to be off screen making it both hard to use any of VLC's controls and/or watching the video.
I think auto resize should resize at most to the maximum available screen size, and also move VLC's window to the screen edge to encompass as much of the screen as possible.
So when you load a video much bigger than your screen VLC will jump to the top left corner and resize to the size of the entire screen minus the taskbar (Behing behind the taskbar is not very useful )
Look at Windows Media Player for an example of this behaviour.