How small? Big enough so that it might just be a few sizes off what you'd prefer? I believe you're using gnome, right? Check out the font preferences. My Desktop font is set to 14, and my app font to 12. With the Bitstream Vera Sans font for each item, I must say it looks very very slick with the right rendering. In the event that you don't have the rendering right yet...
It's tailored for Gentoo, and there's a lot of stuff there about gentoo-specific things, but still I'm pretty sure that the procedure will work for whatever distro you're using. You'll have to make sure you have the latest freetype installed, and X compiled to use it.