In Soas we are forcing a sane dpi for the XO by using a .Xresources file. When I last looked into this, I think it pointed to the graphics driver.
Ran 'livecd-iso-to-disk' with Soas2-200905241902.iso to create a bootable USB stick. Then booted my XO from that stick.
The labels in 'My Settings' using Soas2-20090524 are equally tiny as those same labels using rawhide-xo 20090528. So is the default text in 'Terminal' (in Sugar).
mikus