Why do several Gigabytes of hard drive space appear to be missing in Vista or Windows 7?

XP and Vista/7 both allocate hard disk space, whether it is occupied or not, for something called shadowstorage which is where your System Restore points are saved. Under XP you can specify how much disk space to allocate for System Restore use. Under Vista, this option is gone unless you use the command line method below. The lowest or minimum Shadow Copy Storage space allowed using this method it 300MB.

To check how much space is being used, go to command prompt with administrator privileges:

Click Start - All Programs - Accessories. Right click on ‘Command Prompt’ and click ‘Run as Administrator’.
Type the following in the command prompt: vssadmin list shadowstorage

The results shown will be similar to this:
Used Shadow Copy Storage Space = 2.702 GB
Allocated Shadow Copy Storage Space = 2.933 GB
Maximum Shadow Copy Storage Space = 5 GB

If you feel like Vista is taking up too much space, then use this command to lower it:
vssadmin resize shadowstorage /On=[Drive Letter]: /For=[Drive Letter]: /Maxsize=[space]

For example, if you execute the command below, it will be lowered to 2GB:
vssadmin resize shadowstorage /On=C: /For=C: /Maxsize=2GB