Why can't the "Launcher" Icons be made smaller? At the smallest setting, they are still 4 times bigger than they need to be on a 10" Netbook. The Icons in the "Top Panel" are much smaller and we users don't have a problem selecting them.
12.04 and later
Am guessing that when you say "smallest setting" you mean the Unity plugin in the CCSM (CompizConfig System Manager). For the moment the 32 value in the Experimental Tab for the "Launcher Icon Size" is the smallest that is available. I also believe a smaller value should be available. 28, 24, 20, 18 to a minimum like 8x8 (For people like me with insect precise eyes).
There is an option with
gconf-editor in the schemas/apps/compiz-1/plugins/unityshell/screen0/options/icon_size address. But the value is and currently is not editable. It will soon be however.
UPDATE - Starting with 13.04, users will be able to resize the icons from 8 to 64 through the CCSM.
First install the CCSM (Compiz Config Settings Manager) if you have not yet done so:
sudo apt-get install compizconfig-settings-manager`
In Dash, type cc which should show the Compiz Config Settings Manager app. Open it and go to the Unity plugin:
Select the Launcher tab:
Change the value in the Launcher Icon Size option:
You can change it from 8 to 64. The only deal is, if you right click the Desktop and select Change Desktop Background, the value for the icons found there will be the one applied. Right now, both, the CCSM Icon size and the Desktop Icon size or not using the same variable for this.
As suggested by Ben Lutgens in the comments you can easily accomplish the same by typing the following in the termina:
dconf write /org/compiz/profiles/unity/plugins/unityshell/icon-size "24"
where the 24 will be the icon size. You can change this value from 8 to 64 depending on your TV, Monitor or Display. In my case 20 is perfect.
Have you tried CONFINITY http://sourceforge.net/projects/confity/files/confity_1.0/confity_1.0.deb/download
I have not tested it but it may work for unity 2D