Can't offer any suggestions, but to save you looking in the right wrong direction (Sling changing something behind the scenes), it must be a setting on your computer as V2.0.4 on my WIN7 Home Premium works as you expect, i.e select Full screen by tapping top right, it shows the picture/frame/remote and then after 3 seconds the remote and frame disappear.
I understand that you are having some issues with the SlingPlayer software version since you are not able to get the fullscreen.
I recommend you to check the little pin located at the top of the screen next to the "Log out" link. This pin will allow you to activate / deactivate the controls frame.
Give it a try and let us know how it works for you.