When you use the Auto Arrange or Line Up Icons option on the desktop or in an open window, you'll notice that Windows 95 lines up all the icons in neat little rows, the same distance from one another. If you'd rather they line up closer together, or further apart, change your icon spacing.
Right-mouse click the desktop, select Properties, and click the Appearance tab. Under Item, select Icon Spacing (Horizontal) or Icon Spacing (Vertical) and type a new number next to Size. (The default for horizontal is 60, for vertical 43.) Click Apply or OK to make your new settings stick.
