[G2 and Desire Z Android Development] minotauri:
You can increase the density (sort of like changing monitor resolution) on your screen by simply changing the build.prop file. This gives you more viewing area on your screen. The build.prop file contains many user variables that are editable and one of them is the LCD Density. The lower the number, the higher the resolution. The default value is 240, but by simply changing it to 200, you can increase the resolution and see more emails in your email app, more app listings in the market, more room for widget alignment, crisper graphics, and much more!

UPDATE 03/25/2011: ADDED SCREENSHOTS! (finally)

PERMANENT ROOT SOLUTION:

now that we can do perm root, you can permanently change this by modifying your build.prop file located /system/build.prop. look for ro.sf.lcd_density and modify the number and save and reboot.

Recommended value is 200, though many users like 190. If you are unsure what you like, please try TEST MODE shown below!

Please be sure to download Spare Parts from the Market, and disable Compatibility Mode in the app. This will fix many, many apps from not displaying full-screen, however there are some apps that will not re-size.

This works really well if you pair it with something like Launcher Pro or ADW.Launcher, where you have control over rows/columns and resizing widgets.

Easiest Method -- Go to Market and download one of the LCD Density apps. Search "LCD Density."

Phone-Only Method:

You can use Root Explorer, or any text editor like notepad++ or text edit.

If you use a separate text editor, just copy the file to your SDCard, edit it there, and move it back and overwrite the original. I recommend backing up the original just-in-case. :)

ADB Method:

[Test Mode]

If you just want to play around with the setting for test, you can do something similar to the temp-root method shown below.

Open Terminal Emulator from your phone or use adb shell from your computer:

type: setprop qemu.sf.lcd_density 200 (or 190,etc)

press enter.

type: busybox killall system_server

press enter.

it will reboot quickly with your new display. Just reboot and it'll go back to stock. Once you find something you like, you can edit the real build.prop file. :)

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[original mod / pre-perm-root]

Below is for use with Visionary temp-root app.

This is basically taken from the LCD Density Changer app and applied to visionary.sh

You can increase the density (sort of like monitor resolution) on your screen by simply changing the build.prop file. Unfortunately, since we have temp-root only, it'll revert back. The LCD Density Changer - Free app lets you modify it without editing the build.prop and uses a hot boot to apply changes...

I wanted to automate it into startup with Visionary so here's what you can put into your visionary.sh file without even having the app:

setprop qemu.sf.lcd_density XXX #change XXX to 200, 190, etc
busybox killall system_server

Example Visionary.sh script is found on Post 51. This script also contains commands for Ad Block and Overclocking which can be found in separate threads on the forum.

I use "200" for the XXX density. Some people below mention 190 as their favorite number to use. 240 is the default!

note #1: killall command will do a hot reboot of your system.

note #2: you do not need to download the app to do this. you just need visionary app from Modaco/Paul O'Brien, which is on the market.

Here are some written instructions from V1R3Z on Page 3 of this thread if you do not know how to create and push visionary.sh to your device:

http://xdaforums.com/showpost.php?p=8962877&postcount=27

update 10/30:

added mounting to read/write for /system and /data to the script for users who did not have it already in their script. also some people prefer using 190 as oppose to 200.

update 11/02:

removed mounting for the /data folder as it is unneccessary. make sure you use a proper text editor and save in a format the phone can read. it's probably a better idea to make the script on the phone than in windows.

credit goes to appelflap and jdsemler who found these things.