I've never messed w/ slide show before, so I tried it on one of my lessons. I got less than stellar results. No content at all. Just the title and the continue button. I think the CSS must be broken (or I don't know enough to make it work).
Looking at the documentation, http://docs.moodle.org/en/Adding/editing_a_lesson#Slide_Show there is no mention of a pop up.
I'm also unclear, Mark, on what it is you're seeing when you don't use slide show. I'm using slide show set to off and left menu on, and I get lots of space to read content on each lesson page.
Lesson
Pop Up Window??
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