because for each bit of physical space on the disk, a small chunk of it is used to store the file details etc. (heres a good example... did you know you can physically fit 2mb of sdata ona 1.44mb floppy disk )

this will be very evident ona 40gb FAT32 partition, as it uses up a lot of space for that kinda stuff...

keep your partitions small and use lots of them to minimise the impact (impracticle) or just use sodding NTFS (W2k/XP)