Bottom line:
You may have logical errors on your disk. These are not physical defects, so don't get scared yet. You probably have a lot of lost clusters which are space that is not directly addressible by the OS, but it doesn't know it. This usually happens when you restart or shut down your computer while a program is writing something to disk (or the program simply crashes). In that case, the space becomes physically used, but the file may look like it's only a few KB in size. Try saving a Word document but restart your PC in the middle of the process. That will result in a few KB of lost clusters.
Scandisk or Norton Disk Doctor will find those problems and fix them, reclaiming such lost disk space.
Of course things could be worse if you actually have bad sectors on your disk. For example, you could have 1 GB (which would be terrible) in bad sectors. In this case, the File Allocation Table (and therefore the OS) know about that unusable space and the free disk space will be computer accordingly. So if your HD is 10 GB and you have 10% of it in bad sectors, you really have 9 GB of usable space, and it's time to take the hard drive out and drive a few nails through it (note that it voids your warranty).