//in the hook handler. win_clicked is the HWND of the window whose titlebar has been clicked (i don't know where it would come from. maybe from the wParam or lParam, or a call to WindowFromPoint). hide is a bool that contains whether the window is currently unshaded (true) or already shaded (false).
if (hide)
{
WINDOWINFO wnd_info; //structure to hold info about the window we're working on.
ZeroMemory(&wnd_info, sizeof(WINDOWINFO)); //formality
wnd_info.cbSize = sizeof(WINDOWINFO); //formality
GetWindowInfo(win_clicked, &wnd_info); //fill up our structure
ShowWindow(win_clicked, SW_HIDE); //hide the window in question
//now we will create a window that is as exact a copy as possible as the other window, except for the height being 0.
WNDCLASSEX shadedwincl; //window class
LPSTR clname; //will hold the name of the old window's class
GetClassName(win_clicked, clname, 100); //god help us if the class name is over 100 characters long
GetClassInfoEx(GetWindowLong(win_clicked, GWL_HINSTANCE), clname, &shadedwincl); //fill the window class with an exact copy of the old one
RegisterClass(shadedwincl); //register our copy class
HWND shadedWin = CreateWindowEx( //the HWND of the newly created window will go into shadedWin
wnd_info.dwExStyle, //whatever the old window had as its extended style
clname, //registered above
titletext, //retrieved above
wnd_info.dwStyle, //copied
wnd_info.rcWindow->left, //copied
wnd_info.rcWindow->top,  //copied
wnd_info.rcWindow->right - wnd_info.rcWindow->left, //copied. window's right boundary minus its left boundary
0, //no height--this is the key part of this approach
GetParent(win_clicked), //the parent of the window we are replacing
GetMenu(win_clicked), //the menu assigned to the window we're replacing
GetWindowLong(win_clicked, GWL_HINSTANCE), //formality
NULL); //parameter that we do not need
} //end of "if (hide)"
else // in other words, "if (!hide)"
{
//i'll leave you to write the code for destroying the window we created and showing the old window. hint:
DestroyWindow(myhwnd /*don't know how to retrieve this, you'll have to figure it out*/);
ShowWindow(oldwinhwnd /*don't know how to get this either*/ , SW_SHOW);
} //end of if...else

//hook handler. win_clicked and hide are the same as before
if (hide)
TITLEBARINFO titleinfo; //will hold some information about the titlebar of the window we are shading
titleinfo.cbSize = sizeof(TITLEBARINFO); //formality
GetTitleBarInfo(win_clicked, &titleinfo);
HRGN region = CreateRectRgnIndirect(titleinfo.rctitlebar); //create our region. you may have to cast titleinfo.rctitlebar to (CONST RECT*)
//so region should now be the handle to a region that includes only the titlebar of the window.
SetWindowRgn(win_clicked, region, true); //set the window region to only the titlebar, and redraw it. nothing outside the window region will be drawn. put 2 and 2 together: only the titlebar gets drawn. yay!
} // end of "if (hide)"
else // i.e. "if (!hide)"
{
SetWindowRgn(win_clicked, NULL, true); //remove the window region and redraw the window so it is all shown.
}

shadedwincl.szClassName = "__Shaded-Window-Class5673"; //set the class name to this so that the class can be identified later. the weird name is to minimize the possibility that someone else will have chosen the same name.
.

LPSTR win_clicked_class_name;
GetClassName(win_clicked, win_clicked_class_name, 100);
bool hide = (win_clicked_class_name == "__Shaded-Window-Class5673"); //set hide to whether the window class equals ours