Use Excel's new Expand Formula Bar control to control how much space the formula bar grabs up.
Excel's formula bar displays the contents of the selected cell. If the content is longer than the formula bar, Excel increases the bar's depth to accommodate the entire content (in versions 2003 and older). Consequently, the larger formula bar often obscures other items. Most of the time, the hidden elements aren't relevant to the current contents of the formula bar, so it doesn't matter. If it does matter, there's not much you can do it about it other than turn off the formula bar, which isn't a practical solution for most of us.
Starting with Excel 2007, you have a bit more control in this area. Excel 2007 doesn't automatically change the bar's depth and instead, lets you determine how you view the contents in one of two ways.First, you can read the contents line by line, by clicking the up or down arrows, accordingly. Doing so cycles through the content, line by line. In the figure below, I forced the formula bar to display the second line of the selected cell.
Second, you can display the entire content quickly enough by clicking the single arrow. When you do, Excel adjusts the size of the formula bar to display the entire content. Instead of obscuring other screen elements, as older versions do, Excel 2007 pushes everything down a bit. It's a bit of a trade-off. You can still see the column headers and so on, but a bit of the sheet will extend past the lower edge of the screen.