Until Windows XP came along, 72 pixels was the maximum size that you could set your desktop icons for display. Windows system icons, however, had never been formatted for anything larger than 48 pixels, so if you set your icon size to 64 or 72, you would get a degraded icon -- a more "pixelized" or "mosaic image. With Windows XP, 4 more sizes were included, 64, 72, 96 and 128; they changed the operating system to properly display these larger sizes. Many of the current MS system icons still contain 4-bit (16-color) formats, represented by the bottom row in the graphic.
The default setting for icons for Windows sytems is still 32 pixels. This is the "Large Icon" setting. In Windows XP the word "Large" has been dropped -- it's now called just "Icons." You have to make a change in the Appearance menu to make it larger than this.
The 24-pixel size is most often used by the Windows operating system for displaying icons that have been placed in tool bars and Internet search bars.
The 16-pixel icon size is automatically used when you use the List or Detail folder View settings, and is also used when an icon is assigned as a favicon as it appears in the address bar or as an entry in one of your "favorites" (bookmarked) folders in Internet Explorer.