On a partition, there are individual spaces called
clusters which basically identify that portion of the
disk. Only one file can be in a cluster, but a file can
span multiple clusters. Depending on the file system and
size of the partition, clusters vary widely in size from
usually 512 bytes to 8K or larger.
Since only one file can be in a cluster, a file may be
only 20 bytes long, but will take up a full cluster on
disk, or 512-8K bytes. This is why XP will not allow you
to format a partition of larger than 32 GB in the FAT32
file system, because it results in very large cluster
sizes and a lot of wasted space.
Size on disk displays how much of the disk is being
taken, as opposed to how big the file is, taking into
account cluster sizes and such.
This can also be less than the file size, for example, if
you compress the file. A compressed file may be X bytes
long uncompressed, but while compressed, it will be under
that amount on the disk.