Here is a screenshot of how small “Luxi Sans” looks on my display:
http://en.opensuse.org/images/a/a0/LuxiSans.png
Notice how the glyphs for b, c, d, g are distorted.
Is it a LCD? If so, you’re not running it in native resolution, are you?
It is a CRT running at a native resolution.
Did you consider trying something like liberation sans