You cannot use screen resolution tricks to change the size of the display in virtualbox. As you've discovered, you will just resize the window.
You will have to use the accessibility features in the guest OS to change the font sizes instead.
Thanks KJP - I thought there might be a limitation like that in Virtualbox
I already checked on Accessibilities but there's no facility for changing font size - all I can do there is change the contrasts.
Reckon that solves it.
Actually, you can.
When the Virtual Machine is running, under the "Machine" menu, select "Switch to S
cale Mode" (Host+C). This will let you change the size of the window, without changing the resolution (so everything gets "bigger" or "smaller"). You will lose access to the menus, so to switch out of it, you to use "Host+C" (where "Host" is usually the "Right-CTRL" key).
You can also "force" a specific resolution (in linux, anyway...haven't tested in XP, but I presume it should work) by specifying a monitor.
To test PCLOS on an EeePC (800x480) in VirtualBox first, I selected a Generic LCD - 800x480, and set the resolution accordingly. This let me see how the elements would all fit on screen. I then used Scale Mode to set the window to approximate the physical dimensions of the EeePC, so I could get a feel for how the display would look in actuality...
Hope that helps a little...