Click OK and Photoshop warns you that your document is going to be clipped. Don't panic anytime you see that yellow exclamation mark. Photoshop is just giving you a friendly nudge to ask if you're sure. Click Proceed and now the image should have a much thinner, even border along all four sides.
Canvas Size Practice Exercises for Photoshop CS2 Basics Lesson 2
By Sue Chastain, About.com
Go to Canvas Size again. With the relative option still checked, enter -.75 inches in both the width and the height boxes. By using a negative number we can decrease the canvas size. You'll notice the arrows on the anchor diagram change to pointing in instead of out to indicate that the canvas size will be shrinking. The extension color option also goes away.
Index: Canvas Size Practice Exercises for Photoshop CS2 Basics Lesson 2
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