When a user clicks the X button on a form, how can I hide it instead of closing it?
I have tried this.hide() in FormClosing but
This is the behavior of Modal forms. When you use form.ShowDialog() you are asking for this behavior. The reason for this is that form.ShowDialog doesn't return until the form is hidden or destroyed. So when the form is hidden, the pump inside form.ShowDialog destroys it so that it can return.
If you want to show and hide a form, then you should be using the Modeless dialog model http://msdn.microsoft.com/en-us/library/39wcs2dh(VS.80).aspx
form.Show() returns immediately, you can show and hide this window all you want and it will not be destroyed until you explicitly destroy it.
When you use modeless forms that are not children of a modal form, then you also need to run a message pump using Application.Run or Application.DoEvents in a loop. If the thread that creates a form exits, then the form will be destroyed. If that thread doesn't run a pump then the forms it owns will be unresponsive.
Edit: this sounds like the sort of thing that the ApplicationContext is designed to solve. http://msdn.microsoft.com/en-us/library/system.windows.forms.applicationcontext.aspx
Basically, you derive a class from ApplicationContext, pass an instance of your ApplicationContext as an argument to Application.Run()
// Create the MyApplicationContext, that derives from ApplicationContext,
// that manages when the application should exit.
MyApplicationContext context = new MyApplicationContext();
// Run the application with the specific context.
Application.Run(context);
Your application context will need to know when it's ok to exit the application and when having the form(s) hidden should not exit the application. When it's time for the app to exit. Your application context or form can call the application context's ExitThread() method to terminate the message loop. At that point Application.Run() will return.
Without knowing more about the heirarchy of your forms and your rules for deciding when to hide forms and when to exit, it's impossible to be more specific.