Discrepent Hard drive size

Guys , this is my first thread. I am new to this forum. I want to know the following things :

1.) How does system BIOS reads the Hard Drive capacity ? Is there any controller chip on the HDD that contains the capacity information about the hard drive that the BIOS is able to read ?

2.) Then once again when we try to install Windows on that Hard Drive from where does Windows determine the size of the Hard Drive ? Is it from that chip or somewhere else ?

3.) The reason as why i am asking is because one of my friend has got a New Hard Drive that shows 250 GB in BIOS but while installing Windows on the brand new hard drive the unallocated space is being displayed as 175 GB ??????

Please help me to understand .

Mindless728 is right. Most likely cause is somehow someone created a Partition on this drive that is reserving space.

Assuming you do not actually want anything that is on the drive already, the solution is to delete an existing Partition(s) on the drive first. When you run the Windows Install disk, the first stage is to select which disk to install to. At that point there should be an option to delete any existing Partition(s) before making a new one. Delete them all. Then let Windows use the hard disk, and I assume you will want it to use the whole disk as one volume that you will be booting from, with the NTFS File System.