Just to confirm it still happens to me, after a kdm update (overwrote my
/etc/kde3/kdm/kdmrc), I get huge fonts.
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After installing (and enabling) of nvidia-glx, KDM makes wrong DRI guesses
https://launchpad.net/bugs/37072
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If your X server driver does not set DPI properly, this is due to the fact that
it cannot autodetect your display size.
You can help him with setting DisplaySize in Monitor section as mentioned in
https://wiki.ubuntu.com/AchimBohnet
You should also note that kde-guidance has currenly bug 40683,
