Yes, it works on a Mac; it worked for me. You must follow the directions EXACTLY.

I suspect that you double clicked on the ".pps" file to open it. That just starts the show, and yes, that would be in full screen.

Completely exit PowerPoint and go to the above instructions and follow them, one by one, WITH ONE EXCEPTION. Replace step two with:
2. Start Microsoft PowerPoint by ONE of the following ...
*) If you have one, click on the PowerPoint icon in the Dock
*) OR select PowerPoint fron the Applications -> Microsoft Office 20## -> Microsoft PowerPoint, where "##" is your version.
Then cancel the gallery.

That worked for me on OS X Snow Leopard and Microsoft Powerpoint 2010.

I just tried this with OpenOffice Impress and it also works, though with slightly different menu selections. Also, Impress does not handle the latest version of Microsoft PowerPoint Show documents, ".ppsx".