Could it also be somewhat similar to the "Moon Illusion" where the moon
"appears" to be larger when near the horizon as opposed to when it's
overhead? With Venus, you normally don't see it close to much of anything
else other than other stars. During a transit you have the Sun right there
for a relative comparison.

As others have mentioned, Venus appears larger because it's at its
closest approach. Amazing shots like the one at
http://antwrp.gsfc.nasa.gov/apod/ima...pHa_vt2004.jpg don't
accurately show how much larger the Sun is than Venus. In actuality,
Venus compared to the Sun is nearly four times smaller in diameter
than the image shows. The silhouette there actually corresponds more
closely to an image of Neptune against the Sun, at the Sun's distance.

Cheers,
Ritesh