When you are rendering a file, after you choose the file type, there is a "remaining" on the left side under the pie chart. This is not space remaining on the drive, it's the actual estimated size of the file remaining to be rendered. Since you haven't started yet, it shows the entire file size.
IMO, it's very confusing and not the best part of the interface. All it really needs to say is "file size".
Another solution (that costs some $$, about 50 bux or so) is to get a dual-layer DVD burner, that will give you about 8.5gb of space for your files and requires much less "tuning" or compression to get your video files on to a DVD.