Ok, I guess this is the reason for this difference between "size" and "size on disk":
Your hd is composed of a lot of sectors. Each sector has 512bytes, and it's the smallest unity of the disk. But OSs never organize the files on the sectors directly. They use something called "cluster". Depending on the file system (NTFS, FAT32, or other) and the size of your hard disk, the file system determine a fixed size for the clusters in your disk. And there is a rule: you can only store one file (or part of it) inside a cluster. You can never have 2 or more files on the same cluster. So, here's an example: on a FAT16 system (Win95), a hard drive with more than 2GB have clusters of 32kB (each cluster takes 64 sectors at once). In this case, a 35kB file would take 2 clusters, meaning that 64kB would be used on disk for this file, and 29kB would be unused (and no other file can use this space).
So, here's the final point: the smaller the cluster size, the better your disk will be utilized. In FAT16 and FAT32 systems, the clusters are fixed size, but NTFS (Win2k and XP) lets you choose the cluster size. I chose 512bytes in my computer, it's the smallest option possible (same size as a sector). This way I will have the files taking the minimum space possible in the disk. But this comes with penaltys, of course. As you decrease the size of the cluster, the number of clusters in your hd will increase. And managing a higher number of clusters can be a tough work for the file system. So you may even notice a small performance loss. Anyway, it's your choice.
Your hd is composed of a lot of sectors. Each sector has 512bytes, and it's the smallest unity of the disk. But OSs never organize the files on the sectors directly. They use something called "cluster". Depending on the file system (NTFS, FAT32, or other) and the size of your hard disk, the file system determine a fixed size for the clusters in your disk. And there is a rule: you can only store one file (or part of it) inside a cluster. You can never have 2 or more files on the same cluster. So, here's an example: on a FAT16 system (Win95), a hard drive with more than 2GB have clusters of 32kB (each cluster takes 64 sectors at once). In this case, a 35kB file would take 2 clusters, meaning that 64kB would be used on disk for this file, and 29kB would be unused (and no other file can use this space).
So, here's the final point: the smaller the cluster size, the better your disk will be utilized. In FAT16 and FAT32 systems, the clusters are fixed size, but NTFS (Win2k and XP) lets you choose the cluster size. I chose 512bytes in my computer, it's the smallest option possible (same size as a sector). This way I will have the files taking the minimum space possible in the disk. But this comes with penaltys, of course. As you decrease the size of the cluster, the number of clusters in your hd will increase. And managing a higher number of clusters can be a tough work for the file system. So you may even notice a small performance loss. Anyway, it's your choice.