Why do apps only display in top left quarter of screen after installing Winterboard?
Ok, according to this Cydia thread, you have installed an iPhone 3GS wallpaper on your iPhone 4. Since the iPhone 4 has four times the resolution of the iPhone 3GS the apps will only show up in the left quarter of the screen.
Here's the fix:

Go to Settings&gt;Wallpaper and choose any of the default wallpapers. Hopefully that will work.

And you don't need to restore. Winterboard makes no changes to the original OS files.

Since you can't press the Set button, you will need to restore and make sure that you avoid any apps that use Winterboard. Too bad!! I hope I've been helpful!