Well, it is not a true 40Gigs. HD manufacturers tell you that it is 40Gigs but they mean 40,000,000,000 bytes. A real gigabyte is 1,073,741,824 bytes so there is about a 7% difference between their definition of 40GB and what you might think you are getting. Windows lists my 40GB drive as being 37.2GB and that it has 40,006,156,288 bytes. Formating and partitioning also takes up a little bit of space so your potential drive size decreases further.
That being said. I don't really know where your space is going. You could have a few bad sectors here and there but I would not think 12 gigabytes worth. Is this the drive you have windows and your programs installed to?
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