how old is your computer? it must be from a really really long time ago if you only got 10 gb mine is like 4 - 6 years old and came with 139 gb and my mom's which is like 8 years old came with 500 gb you really need an upgrade.
I've done a bit of computer course work, and it turns out the way the data is stored takes up room on the disk. It's a pain, especially with only 10 Gig. If you look, you'll notice it on all computers...
Quite likely there is a recovery partition, not the FAT (File Allocation Table), so the C drive's partition only has 9.51 available to it. This is pretty common - On my 1 TB hard drive I have several partitions of various sizes and various operating systems.
(Electrical Engineer, 20 years as a consultant, yada yada yada)
It is like that because Windows (XP, Vista, or 7) and all of it's software takes up memory too. So does your desktop background, and many other things you would not think about such as browsing history in your own folders (not internet history).
It not Vista or Windows 7, because you have to have to do some hacking voodoo to get it to do FAT32 at all. XP only did if you you used an Upgrade Disk, even then it asked you if you wanted to convert the drive with a defualt of yes