Microsoft Windows has never done a great job of handling displays with high pixel densities. Every tablet and netbook I’ve reviewed which had a 1366 x 768 pixel display on a 10 inch or smaller screen has featured sharp graphics and text — so sharp that it can be hard to see what you’re looking at. Adjusting the DPI and font settings can alleviate the problem a bit, but the problem is that Windows 7 doesn’t handle vector graphics the way as some other operating systems, which means that many graphical elements look smaller on high resolution displays.
Windows 8 could change things. The operating system will support automatic scaling for some graphics, and Microsoft has published guidelines for developers to make sure their apps look good when scaled.
The long and short of it is that Windows 8 will support offer better support for small, high resolution displays and we could eventually see slate computers with 10.6 inch, 1920 x 1080 pixel screens. That would give the display a 208 PPI (pixels per inch). Most Windows machines today have 150 PPI or lower screens.
The Apple iPhone 4 and latest generation iPod touch, by comparison have 3.5 inch, 960 x 640 pixel displays with 326 PPI. The original iPhone had a 165 PPI screen. Graphics don’t look smaller on what Apple calls a Retina display though. Instead everything just looks better since when you look at the screen you can’t pick out individual pixels at all.