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I don't think that is saved in any of the tool palette files, because multiple users can share the same palettes and each can have their own size setting.
AFAIK, the icon size is saved locally, in the file:
%appdata%\Autodesk\<product>\<language>\Support\Profiles\<profile_name>\Profile.aws
Example line:
<Image SizeCY="32" SizeCX="32"/>
thanks. I went into the AWS and edited the XML. However as soon as I SWAP the palettes it resets the size back to 32x32. Where can I find that XML tag or system variable that is causing the reset?