I have seen that Windows can switch to the very basic console interface when updating the video drivers and I have also seen programs like Borland C++ doing this.
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Windows 7 does not support Full Screen console applications. On XP you can use SetConsoleDisplayMode, you will need to P/Invoke to this, but it is relatively simple. I know on win 7 x64 this function will fail with error 120 This function is not spported on this system
To get the console handle you can use some of the code from this answer.