On the latest stable build, there appears to be an issue with the "Show ground and selected layer" option. Clicking on the left/right arrows to change the selected layer instead just toggles the option on and off (if you click on the arrow, it's actually the radio button for the option that gets pushed in, and not the arrow). So there's no way to change the selected layer to anything other than the default "1".
Railfan727, please, download some nightly. In all currently available nightlies (if I am not wrong - because I don't remember when it was done) it is corrected with added drag and pull corner. So you can improve width of this dialogue as you need.
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It was r4377 where it appeared. See this topic (Display menu, text out of bounds, layer view not modifiable 100.x) (http://forum.simutrans.com/index.php?topic=6663.0).