On Windows XP you can customize the spacing between icons on the desktop.

The first step in doing this is to make sure that the Auto Arrange feature is off. Check this by right-clicking on the Desktop and selecting Arrange Icons By > and then make sure there is no check next to Auto Arrange. If there is a check next to it, select it to toggle it off. It should look something like this:



Once Auto Arrange is off, right-click on the desktop and select Properties. Select the Appearance tab and then click the Advanced button near the bottom. This will open the Advanced Appearance panel.

In the Advanced Appearance panel, select the Item Spacing (Horizontal) option in the Item: field. It should look something like this:



Once it's selected, you can adjust the size (currently 43) to anything you like. Once you set the horizontal spacing, select Item Spacing (Vertical) from the Item: field and repeat the process.

Once your changes are made, click OK as needed to save your changes. You'll then have customized icon spacing on your Windows XP desktop.