You're running your monitor at a fairly high resolution. This will tend to make fonts fairly small. (Since windows resolves fonts at a fixed pixel height, note that this has not been fixed in vista, same problem that has persisted for years now.)

To get around this, many people turn on "Large Fonts". This has the unfortunate side effect on messing up most programs. (Including many issues in most Microsoft software.)

Check to see if you have turned on "Large Fonts". Go to "Start" - then "Control Panel" - then "Display" - then "Appearance" tab - then "Font Size" selection box, and make sure "Normal Size" is checked.