QUESTION :
Is there any virtual desktop for Windows (XP) which can emulate higher resolution by scaling/zooming out?
ANSWER :
There’s a program called SDesk which I don’t think is still in development but you can still find a download link from CNet. It will let you create a desktop up to 32,000 x 32,000 pixels.
There is Infinite Screen tool:
http://ynea.futureware.at/cgi-bin/virtual_display_manager.pl
Does not limit virtual screen size
Allows looped virtual screen
Lets set windows’ sizes larger than physical display size
Supports multi-display systems