have u tried system restore or a virus scan? I've had similar issues with usb sticks and i had to reformat them to retrieve the lost space that was supposedly used up even though nothing was on the disk.
if that doesnt work try to see how much space windows is using for restore points as well as hiberfil.sys (if hibernation is enabled), and pagefile.sys (virtual memory).
I would try disk cleanup as u might have some hidden temp files taking up space.
another issue might be ur bios might not recognize the size depending on how old they are, make sure u have the latest bios for your motherboard
also have a look at this http://www.computing.net/answers/windows-xp/hdd-size/156938.html