Same question here... over a year later! Mine's about iCal 6, but it's the very same issue.
Cannot stand the scrolling list of events. When I select a day view, I want to concentrate on that day's events-- and not see a long list of other events for other days!
Rick, did you ever find a solutiion? Maybe there's a hidden Terminal command to turn it off. I kept looking for dot within the pane divider to collapse it, but it's not there. Nor is there an option under Preferences!
Long live Snow Leopard and the old iCal!