Using first principles calculations with ultrasoft pseudopotentials, we study the thick dependence of the atomic and electronic structures of (110) slabs of Ti O2 rutile having one to five layers. Thin slabs with an even and odd number of layers show significantly different structural characteristics and electronic properties that can affect photocatalysis as well as the catalytic behavior of supported clusters. We discuss the origin of the oscillating band gap for both an even and odd number of layers and the effects on the atomic, electronic and magnetic properties of octahedral M6 and icosahedral M13 (M=Pd,Rh) clusters deposited on stoichiometric slabs with two and three layers. Calculations have also been carried out for a Pd atom deposited on different sites of a two layer slab. These results show that the bridging oxygen atoms are most reactive and preferred for adsorption. The adsorption energy of a Pd atom on the bridging site has only a weak dependence on the thickness of the slab. However, the adsorption energy of a cluster supported on a three-layer slab is significantly higher than the value for a two-layer slab due to significant structural differences and this alters the magnetic and electronic properties of the supported clusters. The magnetic moments of Pd clusters are reduced after interaction with the support. However, for Rh clusters there is an increase in the magnetic moment. In general we find that the cluster-support interactions affect mainly the cluster and support atoms that are in contact at the interface. The variation in the band gap with slab thickness can, however, lead to metallic character of the slab after cluster adsorption and this could have important consequences for catalysis. {\textcopyright} 2006 The American Physical Society.