I don't use twin-view, so I'm not sure, but I suspect you are on the right track. You'll want to keep playing with the display size until the calculated DPI gets down to what you want.
$ xdpyinfo | grep "dots per inch"
resolution: 74x74 dots per inch
Will tell you what your resolution is. You might find that its not symetrical, if the twin view thing is confusing things. Look in your XFree log files (/var/log/XFree86.0.log for Red Hat using gdm) for the ddc section.
(**) NVIDIA(0): Display dimensions: (543, 407) mm
(WW) NVIDIA(0): Probed monitor is 360x270 mm, using Displaysize 543x407 mm
(**) NVIDIA(0): DPI set to (74, 74)
Hope this helps.