Hey man,
Offtopinc reply introduction: I have 22" wide LCD also and i play on 1280x800 - it is proportional resolution to 1650x1050 and pixels seems not to blur so badly. However, your file directed is awesome to edit! At least you can put more funds to starting family above 20K
or give some for starting students to afford a not-so-empty frat.
Well, now to the business...
I recommend you to take a better XML editor (some structured, maybe even graphical), as this file is very messy and too much parameters for a clean eye on SimPE. I say so because there is a lot of areas defined in pixels, which can be very easy moved, but be precize in calculations, as if you do something wrong it will disort everything. You can easy check which graphical part you move by finding it's file by instance, which represents ID. Example:
<LEGACY clsid=GZWinFlatRect iid=IGZWinFlatRect id=0x2d051e30 area=(105,594,106,595) fillcolor=(0,0,0) caption="options panel anchor" winflag_visible=no winflag_enabled=no winflag_moveable=no winflag_sortable=no winflag_pbuff=no winflag_pbufftrans=no winflag_pbufferase=no winflag_alphablend=no winflag_acceptfocus=no winflag_mousetrans=no winflag_ignoremouse=no colorleft=(0,0,0) colortop=(0,0,0) colorright=(0,0,0) colorbottom=(0,0,0) style=nofill > - caption makes a clue, but you better find what you are moving, and move all controls which are on top of it also! i think it is a hard job because you will have to move almost everything, and recalculate almost everything.
This XML seems to link every graphics item contained in the same package. I doubt it is wise to modify that file as it is huuge (15MB in BV, 70MB in base game) to post as a hack here. Better to seperate it for dowloads folder. And YES you can edit everything and it will work. Just don't mess up controllable areas away from their graphics. I am experimenting with more delicate and sensitive things - wants, and it is working! I only am afraid to mess up Group IDs and instances as i have them almost all possible range wide (0x00100000 to 0xF3F00000). I know how to check for unique instance, but not for unique group... i'm afraid to replace something...