I'm looking for a little program that will hide applications from the
taskbar in Windows XP.  Additionally, if it could place them in the
system tray instead, that would be great.

It is important to note that I am not talking about minimizing the
program to the system tray, as many programs are capable of
doing; I want to have the program removed from the taskbar when it is
not minimized as well.  I have found NUMEROUS system tray MINIMIZATION
tools, but none that will keep programs from the taskbar at all times.

An example of the use of this program would be the AOL Instant
Messenger buddy list, which can only be removed from the taskbar
when it is minimized.  This program would allow it to be hidden from
the taskbar even when it is present within the desktop work area.

Freeware is best, of course, but I am willing to pay for this program.
 I guess asking this question proves that.

You could try a different Windows Shell that doesn't have a task bar...

That seems a bit extreme for what I'm trying.  I've also had bad
experiences with alternative shells in the past.  Mostly though, I do
like Windows.

well, you also have the ability to shrink your taskbar to almost nothingness... :)

The application you are looking for is called 4t Tray Minimizer. You
can download both the 'free' version and the pay-for 'pro' version
here: http://www.4t-niagara.com/tray.html

Hmm, thanks, but I tried it and once again that program doesn't seem
to be it.  The name gives it away right off the bat: Tray "Minimizer."
 I want a program that will keep stuff off the taskbar while not
minimized.  I can't believe this is so hard to come by.  Very many
programs have it as a built-in feature - Winamp, Rainlendar, EzPop,
Klipfolio, just about any antivirus software - so how can it be so
difficult to code externally?

I think I found it.. http://www.kfsoft.com/trayer/intro.htm
It says, "Trayer is a program that runs applications as icons in the
System Tray area, instead of buttons occupying the precious estate on
the Taskbar. Trayer would be ideal for programs such as WinPopup, CD
Player, or any background processing programs that you want to keep
running without taking up any Taskbar space"

"the ability to remove the Taskbar button of the target application completely."

Google Search: run application in system tray
Registration price: $12.00

I hope this free comment helps.

crythias-ga, your persistence is extraordinarily appreciated.  I've
been looking for this program so long, I could hug you.  I wish you
could accept the money from Google Answers, at the very least.  In any
case, you should be a researcher yourself.  I'm amazed that you found
that.  Thank you so much.