Yes it can...In TRS2006, you find out your PC monitor max native resolution (or whatever resolution you are currently using)...and select in Trainz Screen-"Options" display settings to run in the next smaller resolution down, than what your PC screen is running in.
And in your trainzoptions file, the -fullscreen line; gets changed to -windowed
It is handy, sometimes...although it can get be problematic, as screenshots "PrtScr" are taking a picture of your entire screen including the screens toolbars, and other Trainz problems like lag and bad framerates may occur.
It is highly handy as you can surf the web, Google Earth, Yahoo IM, view Topo Maps...all the while running Trainz, and sliding the Trainz screen out of the way, by dragging it across the screen.
You can always change it back to the fullscreen mode anytime by changing your line in the Trainzoptions file back to -fullscreen , and changing your Trainz "Options" resolution setting back to where it previosly was set at.
Keep a hand written logbook of you original Trainzopitions file, and what your "Display" resolution settings were. A handwritten logbook is a handy thing for back reference !