To adjust the vertical space between desktop icons in windows xp follow the below steps
Step 1:
Right click the desktop and then click Properties.It opens the display properties window.
Step 2:
Click the Appearance tab and then click Advanced button in the bottom of window.It opens the Advanced Appearance box.
Step 3:
Select Icon Spacing (vertical) from the Item list.
Step 4:
Change the size in the Size box.And click OK
