Just right-click on the desktop and select "Personalize". Then select "Window Color and Appearance" and press "Open classic appearance properties". Then press the "Advanced" button and choose "Icon" from the item drop-down. Then choose a smaller size like 8 or 7 from the Size drop-down. Apply the changes and your desktop font will be the new size. Simple. :-S
Font size can be changed in Vista
Just right-click on the desktop and select "Personalize". Then select "Window Color and Appearance" and press "Open classic appearance properties". Then press the "Advanced" button and choose "Icon" from the item drop-down. Then choose a smaller size like 8 or 7 from the Size drop-down. Apply the changes and your desktop font will be the new size. Simple. :-S