I remember seeing Mark Russinovich present at TechEd a while back, and was impressed when he used a zooming utility to show one quarter of the screen zoomed in enough that it was easy to read the screen, even from the back of the room.
Presenting to even a small room of people and when doing a demo, using one of the various zoom utilities helps draw attention to stuff that matters - whether that's a line of code or a particular dialog box. I started using zooming software, and it's amazing how many people ask "how did you do that?" - I think that everyone who presents and demos software should consider using some kind of zooming software as an essential tool.
Oh... and DROP YOUR SCREEN RESOLUTION! I hate seeing 1400x1200-odd resolution being projected to a 8x6' screen at the front of a 200' room - nobody beyond the front row can read anything!
Now a while ago, I got a Wireless Notebook Optical Mouse 4000... bit of a mouthful of a name, but it's a little bag-friendly mouse with great battery life, and one of the main reasons I bought the thing - the Magnify button. This allows you to zoom in on a resizeable and moving magnified window, which floats over the thing you're trying to show.
It's possible to use the zooming software either by having a supported mouse (like the WNOM 4000) which has a dedicated magnify button, or by installing the free IntelliPoint software, and by assigning another button (eg the "Click the mouse wheel" action), you can zoom even from a traditional mouse. The newly published Intellipoint 6.1 also supports Vista, and even works in the Aero Glass video mode (though you may see some weirdness in the video driver when activating the magnify). I've been using the IntelliPoint beta for a while, and the Magnify works better in non-Aero mode (ie switch the colour scheme to "Windows Basic".
Another option is to try Robert Burke's excellent NLarge utility, which zooms a quarter of the screen at a time in a nice "whoosh" fashion... It's great for showing static content, but (unlike IntelliPoint) it doesn't allow you to operate the machine whilst zoomed, though it does allow you to draw on the zoomed-in image, so if you're just trying to highlight something that isn't changing, that could be a better fit.
Give each of them a go and figure out which works best for you!