Right-click the desktop and select Properties. In the Display Properties dialog box, click the Appearance tab, then click the down arrow under Item and select Icon Spacing (Vertical). Click the up or down arrow next to Size to change the current spacing, then click Apply to see your change on the desktop.

If the icons look too far apart, decrease the Size setting, then click Apply again. Or, if the icons are so close together that they're overlapping, increase the Size setting. (We were able to fit nine desktop icons in each row by changing the vertical spacing to 30.)

Follow the same steps if you want to adjust the horizontal icon spacing (also in the Item list). Then, to save these changes as part of a color scheme, click Save As, name the scheme (or type the name of the current scheme), and click OK. Otherwise, simply click OK to close the Display Properties dialog box.