did you by any chance change the icon sizes via a reg edit hack... or install a dodgy theme (.msstyles file) ?
best way about getting that fixed would be:
control panel -> display -> Appearance Tab -> Advanced Tab -> In the new window click the drop down..
1. Select "icon" set it to '32'
2. Select "icon spacing (Horizontal) - set it to '43'
3. Select "icon spacing (Vertical) - set it to '43'
4. Cross your fingers
5. Offer a sacrifice... (not 100% neccesary)
Click OK... should sort things out for yah.. hopefully
Or.. alternatively you could go back to the Display Properties Window (Display in control panel).. go to the first tab -> Themes... Select Windows Classic.. hit apply.. that would mean losing yer current theme... but still.. should resolve the problem...
but just to save my back... hit the 'Save As' button before.. just in case it dont work.. and you want to resort back to your theme.. with the funky icons
Ep, glad to see you come back and tidy up...did want to ask a one day favor, I want to enhance my resume , was hoping you could make me administrator for a day, if so, take me right off since I won't be here to do anything, and don't know the slightest about the board, but it would be nice putting "served administrator osnn", if can do, THANKS