You can manage your desktop icons in windows XP horizontally as well as vertically spacing. You can change the location, size of icons and spacing between icons manually but you can arrange these setting using windows methods.
First Right click on your windows XP desktop then click on Properties option. Here click the Appearance tab then go to Advance button and under Item you will find many options to change the desktop icons, for example choose icon spacing in both ways and then here you can change the size putting number (minimum or maximum) under size. When you finished all setting then click ok button.
