We study the structural and dynamical properties of paramagnetic colloidal spheres interacting as repulsive dipoles in two dimensions and confined between parallel hard walls. We observed that the structure and dynamics of the self-assembled colloids are strongly dependent upon the width of the confining channel. The system exhibits re-entrant behavior as a function of the channel width, transitioning from solid-like to liquid-like repeatedly in excellent agreement with simulation results. For large channels, an ordered layered structure self-assembles near the walls, but this local structure is not commensurate with the bulk structure, leading to localized stable defects.