and here is my attempt at clarification, based on not only fact but also actual results.
First, a point of clarification.
An LCD native resolution is the actual number of screen pixels horizontally and vertically (and the number are always related to in that order, h then v). To attempt to drive the LCD panel at any value other than its native resolution will always result in non-crisp images (pictures or fonts) (Well, unless you happen to hit upon a value that is exactly a value that divides cleanly into the native resolution - highly unlikely).
Most 17" and 19" non-widescreen LCD displays have the same resolution, 1280x1024.
Many widescreen 19" and 20" LCD panels have a resolution of 1440x900
And the other widescreen 20" and most 22" LCD panels have 1680x1050 resolution.
The LCD monitor will nearly always be filled out completely. There are some oddball situations that can force the output of less than the LCDs native resolution to only fill out to the output pixels (such as you have a 1280x1024 panel, and are sending an 800x600 signal to it, thus, there will be a black border from the "unlit" pixels) but I have only seen that in some laptop computers with the internal display, not in any separate LCD display.
Once you set your video resolution to the native resolution of the LCD panel (and to NOT do so, you are really doing yourself, and your eyes, a disservice) if the display icons and fonts are too small for you, then there are adjustments to the individual groups accessible via the properties of the display.
But before you attempt to individually adjust those items, there is one global adjustment you can make that affects the whole of the display and nearly every other thing. Try that first!
Believe me, I know adjusting for the large icons, and the large or extra large fonts, and then having to adjust the icon spacing so that things are not crowded on the screen is tedious and time consuming, and also most times less than satisfactory.
So, here is where you can find that one global adjustment:
Right-click an unused area of your desktop, and
select the "Settings" tab,
click the [Advanced] button,
on the "General" tab change the 'DPI setting'
It, most probably is already set to something like "Normal size (96 DPI)"
Setting it to a higher DPI will make everything respectively larger.
Such as the other common setting should be "Large size (120 DPI)"
If you have tried that, and like neither, you can also select "Custom setting"
There's a ruler, that you can drag, or a number% you can enter, there.
Set it something you like.
While this "global" DPI setting does adjust icons and fonts equally, WinXP does not do a perfect job of it. There are still some applications and windows that get their internal sizing to the actual screen pixels. And, by the way, WinVista does do a better job of getting it done right - still not perfect, though.
So, once you have made this global setting, and still you want, or need, to tweak, do it then.
There are the aforementioned IE quick font sizing tricks (Ctrl and roll the mouse wheel) or clicking on the Zoom level (IE v7) or View text size controls.
I want to say again, because it seems like so many people get it wrong, drive your LCD panel to the native resolution, and adjust other things to make things bigger or smaller.
Last point, there is a "ClearType" adjust setting for the display (and I always use it) that can be further tweaked by going to the Microsoft ClearType website (http://www.microsoft.com/typography/ClearTypeInfo.mspx) but that just affects the fonts on the screen, not images.
As for my personal results. I have 4 LCD screens:
22" 1680x1050 (yes, a widescreen), and
15.4" 1920x1200 (a laptop, not only a widescreen, but extremely small pixels)
In every case, I have first set the display to the native resolution for the clearest of displays, then set the ClearType, then set the Display's Advanced setting to some personal preference of screen DPI, and then finally adjusted whatever minor tweaks I like in various applications to get my desired look.