The image is adapted to the new pixelate W and H you set., thats why it moves. You can drag/drop the image or double click in the image to set to center again.
The zoom in-out is just for view purposes. When you export the image the zoom is set to 1:1. Also if the image is 512x512 and you set pixelate WH to 4, the image exported will be 128x128, due 512/4=128 that are the real pixels and is made in this way due people want export the image at real pixels to use in their game as textures or whatever, instead of export at 512x512 with the pixelation and do in PSP another resize to get the 1:1 pixels.
About ascii in my case works perfect, Win7 64bits. Can you do a gif of what is happening to you?