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+# GUI Layout Audit Report
+
+## Current Panel Distribution
+The GUI currently uses a multi-column layout with hardcoded initial positions:
+
+1. **Column 1 (Left):** Projects (Top), Files (Mid), Diagnostics (Bottom).
+2. **Column 2 (Center-Left):** Screenshots (Top), Theme (Mid), System Prompts (Bottom).
+3. **Column 3 (Center-Right):** Discussion History (Full Height).
+4. **Column 4 (Right):** Provider (Top), Message (Mid-Top), Response (Mid-Bottom), Tool Calls (Bottom).
+5. **Column 5 (Far-Right):** Comms History (Full Height).
+
+## Identified Issues
+
+### 1. Context Fragmentation
+- **Projects**, **Files**, and **Screenshots** are related to context gathering but are split across two different columns.
+- **Base Dir** inputs are repeated for Files and Screenshots, taking up redundant vertical space.
+
+### 2. Configuration Fragmentation
+- **Provider** settings (API keys, models, temperature) are on the far right.
+- **System Prompts** (Global and Project) are in the center-bottom.
+- These should be unified into a single "AI Configuration" or "Settings" hub.
+
+### 3. Workflow Disconnect (The "Chat Loop")
+- The user composes in **Message**, views in **Response**, and then manually adds to **Discussion History**.
+- These three panels are physically separated (Column 3 vs Column 4), causing unnecessary eye travel.
+
+### 4. Visibility of Operations
+- **Diagnostics** and **Comms History** are related to monitoring "under the hood" activity but are at opposite ends of the screen (Far Left vs Far Right).
+- **Tool Calls** and **Last Script Output** are the primary way to see AI actions, but Tool Calls is small and Script Output is a popup that can be missed.
+
+### 5. Tactical UI Density
+- Heavy use of `dpg.add_separator()` and standard `dpg.add_text()` labels leads to "airy" panels that don't match the "Arcade" aesthetic of dense, information-rich displays.
+- Lack of clear visual grouping for related fields.
+
+## Recommendations for Phase 2
+- **Unify Context:** Merge Projects, Files, and Screenshots into a tabbed "Context Manager" panel.
+- **Unify AI Config:** Merge Provider and System Prompts into an "AI Settings" panel.
+- **Streamline Chat:** Position Discussion History, Message, and Response in a logical vertical or horizontal flow.
+- **Operations Hub:** Group Diagnostics, Comms History, and Tool Calls.
+- **Arcade FX:** Implement better visual cues (blinking, color shifts) for state changes.