There are a few factors that conspire to make you have less disk available than the labeled disk size.
Firstly, marketeers of hard disks conspire to make you think you're getting more than you are, by defining a GB as a million bytes rather than as 1024*1024*1024 (which is how a GB is defined technically) which means sizes are technically overstated by about 7%.
Second, there is normally overhead on disk related to basic management of the disk. This means that more space is allocated to a file than is actually used by it. If you have lots of little files, they can actually consume considerably more disk space than their reported size would suggest. Different disk formatting techniques can change this (eg by reducing cluster size) but the basic fact of life is that disk contents need to be logically indexed in order to be able to save and retrieve data, and indexing schemes (eg file allocation tables) consume disk space.
Third, and often the most significant if you don't have lots of little files on your disk, most operating systems allocate hidden files that can consume large amounts of disk space. Windows certainly does this: the swap files on most systems, by default, is larger than the RAM installed on your system and is on the same disk that the operating system is installed on. So, if you have 1GB of RAM, you typically have at least 1GB of disk space allocated to the swap file. You can eliminate some of these files, but the consequence is normally degraded system performance. Windows also allocates disk space to the registry, which is essentially a large database of all sorts of data related to the system and to programs installed on it.
Rather than worrying about these things, you will normally be better off buying a second and/or larger hard disk.
