<p>I keep finding files which show a size of 10kb but a size on disk on 10gb.  Trying to figure out how this is done, anyone have any ideas?</p>

You can make sparse files on NTFS, as well as on any real filesystem. :-)
Seek to (10 GB - 10 kB), write 10 kB of data. There, you have a so-called 10 GB file, which in reality is only 10 kB big. :-)