Windows 7 - hard drive data size different

I just installed a 1 terrabyte hd and installed windows 7 x64, getting ready to transfer files from my 500 gig hd and noticed I have windows installed and firefox and a few games same as the 500 drive, however it seems to be taking a lot more space than the 500 gig, 500 gig used space is 196 gig, and I don't have 1/3 the files on the 1 terr. and it's showing 396 gig used ???
any ideas on whats going on here, it doesn't make any sense...

Since consumers don't think in base 2 mathematics, manufacturers decided to rate most drive capacities based on the standard base 10 numbers we are all familiar with. Therefore, one Megabyte equals one million bytes while one Gigabyte equals one billion bytes. This isn't too much of a problem with fairly small numbers such as a Kilobyte, but each level of increase in the prefix also increased the total discrepancy of the actual space compared to the advertised space.

Here is a quick reference to show the amount that the actual values differ compared to the advertised for each common referenced value:

Megabyte Difference = 48,576 Bytes
Gigabyte Difference = 73,741,824 Bytes
Terabyte Difference = 99,511,627,776 Bytes