Index: wp-admin/js/custom-background.dev.js
===================================================================
--- wp-admin/js/custom-background.dev.js	(revision 17614)
+++ wp-admin/js/custom-background.dev.js	(working copy)
@@ -8,7 +8,12 @@
 
 jQuery(document).ready(function() {
 	jQuery('#pickcolor').click(function() {
+		window_height = jQuery(document).height();
 		jQuery('#colorPickerDiv').show();
+		// fit to the window
+		colorpicker_offset = jQuery('#colorPickerDiv').position().top;
+		if ( colorpicker_offset + 197 > window_height )
+			jQuery('#colorPickerDiv').css( 'top' , colorpicker_offset - 223 );
 		return false;
 	});