David,
My answers below are in blue

>Zlatin,
>
>Since the ActiveX is hosted by its own window I think that's why you are seeing the effect you are seeing.
>

So, Visual FoxPro HWND control is hosted in its own window. Other ActiveX controls like the TreeView control also are hosted in own windows. However we do not experience such problems with these controls. So it is our control and FoxPro doing something "wrong". I need to figure out what is this and how to prevent it.

>There's nothing you can do about that behavior.
>

I am not sure... see above

>You can instead put more intelligence in your code that's using ActiveForm and test to see if you really have a VFP form or not.
>

Yes, this is what we do now... We check the BaseClass of the ActiveForm property... but it is dirty code and does not conform to what VFP help says about the ActiveForm property.
Thanks for your help