Looks rotated 90 degrees to me. If you turn your monitor on its side, it should look as you expect. :)
Seriously, though, I think that it's behaving as designed. You are getting a 90 degree rotation on the desktop because you asked for it. Instead, make it conditional - if _WIN32_WCE then use rotation, otherwise don't use rotation but set the display width and height.
This is definitely a change from how the old GapiDraw 2 LANDSCAPE flags worked; it startled me too, but it makes sense.*
* "<some very complicated explanation> but it makes sense." is something I see in the usability lab as participants try to justify something that took them 60 minutes to figure out. It's painful to hear - I always want to scream "No it doesn't! If it made sense you wouldn't have wasted an hour of your life!!!!". Thank goodness for the one way glass.
