# Installing Guest Additions should resolve the issue
yum install kernel sources
yum install gcc
yum install kernel-devel
# if uname -r shows PAE release e.g 2.6.18-194.26.1.el5PAE then install kernel-PAE-devel
yum install kernel-PAE-devel
# run the guest addition installer
sh VBoxLinuxAdditions-x86.run
# Use System->Administration->Display to set the desired resolution; Reboot.