Are you using Win2k? That's normal. Even if the files aren't compressed you will see the size the file takes up on disk. In Windows, files are stored in such a way that little portions of the disk are used to contain fragments of the file. Each of these small portions of the disk can only contain one file fragment. If the file fragment is really small it will not fill up the portion of the disk and so even though the file might be 1 byte, it might take up 4 kilobytes on the disk.
This is why Windows reports the actual size of the file and the amount of space it takes up on the disk.
You can check if you have Win2k file compression on by right clicking on the folders that you think are affected. Click 'Advanced' and then see if the two options in the bottom of the window regarding encryption and compression are checked. If they are, uncheck them.
-GL