My desktop machine blew up, so I got a lovely fresh install of Jaunty. And, X and Gnome still disagreed by default about my actual screeen size... it was unreadably small with the default fonts. I've posted the following instructions before - these are basically unchanged except that the location of the fonts dialog has moved.
Tip for folk that would like X to show fonts (i.e. the GDM log in screen) in the correct size: Teach X about the dpi setting!
Step 1: run xdpyinfo and look for the dimensions: line. There will be something like this:
dimensions: 1280x768 pixels (266x161 millimeters)
resolution: 122x121 dots per inch
Grab a ruler and measure the screen you have. If it matches the millimeters reported by X, then skip step 2.
Step 2: edit /etc/X11/xorg.conf, and locate your Monitor section:
Section "Monitor"
Identifier "Generic Monitor"
Option "DPMS"
DisplaySize 265 160
EndSection
Add in a DisplaySize like I have there. Now logout of your GUI and restart X - you can run /etc/init.d/{g,k}dm restart from the console, or do what I do - just hit ctrl-alt-bkspace so it restarts. Your login screen should change appearance slightly - either the fonts and regions will get bigger if your dpi was set too low, or vice verca.
Step 3: (For KDE users, someone please tell me what it should be, for GNOME read on)...
Run xdpyinfo again and find the Resolution: line. Ignore the fact that it may not be square, grab one of the two numbers ( I suggest the higher)..
Go to System, Preferences, Appearance, and the Font tab. Select 'Details'. There is a Resolution field there. Put in the single number you chose. Changes should take effect immediately.
Applications I know of which benefit from having this set correctly:
xpdf, gnome-* (panels are readable etc etc), firefox.