bikeit,
Looking at the screen capture, I'm not seeing the straight lines you're referring to.
Are the lines bordering each image layer (like a stroke)? Or are they blue horizontal lines that span the whole collage (in other words, are they "guides")? If they're guides, you'd be able to click on them and slide them around.
Images / Image Size is not where you go to view the image 100%, it's the tool you use to resize the image or change the resolution. To view larger, click CTRL + (plus) to increase the size and CTRL - (minus) to decrease the size. You'll see the percent size change next to the file name in the upper corner.