.XAR files with a thumbnail icon.

[mwenz]

...Are you saying that you see thumbnails of what's in your files?

Yep. And preview pane.

...i've always had my folder view as small icons. i tried setting it to both medium and large icons...

You should also be able to hold the ctrl key down and roll the mouse wheel forward/backward to resize the thumbnails (assuming your mouse has one).
Mike