For the third time
From apple's site " Both models have brilliant 1024-by-768-pixel resolution ideal for doing everything from working on spreadsheets to displaying your movies and digital pictures in millions of colors "
The resolution is the number of pixels, pixels are a unit of size like the inch but not the same. OSX does not care what size the screen is, it cares about the number of pixels. To the operating system the display on the 12" and 14" iBook is the same under the same video card. You have to understand this very basic fact. The pixels are bigger on the 14" iBook because they are streched over the screen compared to the 12" iBook, the same way the pixels are strechted across TV's, I"m sorry this is so hard to understand but this is how it works. Programs have set sizes they open to, Programers say I want this to open and be 100x200 pixels, if you have a 23" display or a 10" display, the program will open up at that size , because thats how its written into the program. OSX is intuitive (sp? ) but its not magicx either, iTunes opens at the same number of pixels on every machine, because thats how its programed. It appears bigger becase the pixels are bigger on the 14" iBook. Since the pixels are spread more you cna downsize it a little and still have it be functional and then open more windows and how more perceived work space.
Do you have a spare CRT around ? Use the VGA adapter to mirror the display to a 17" CRT with 1024x768 as its main resolution. That 17" CRT has the same resolution and hence real estate as the iBook but things will LOOK bigger. They are not bigger they are the same size as on the iBook but they will look bigger becuase its a bigger display. I don't know how else to explaing this. Same resolution means same real estate, you don't need to compare them to know this, if you perform your experiments and tests with a ruler you will see that the images and programs on the 14" iBook are bigger due to magnifcation.