System Restore (HDD Space Config/Behaviour)

Hi,

To reduce the max amount of space system restore uses I reset the reg
key at:

HKLM\Software\Microsoft\Windows NT\CurrentVersion\SystemRestore
\DiskPercent=3

To 3 as you can see, so my slider for System Restore shows use 3% max
of the drive.

My drive is 74.5 gb. When I check the size properties of "c:\System
Volume Information" is shows as:

Size: 6.29gb
Size on Disk: 3.36gb

Can anyone explain this? Does the "size" show larger as this is
uncompressed, but it's really only taking 3.36gb up? Also, 3% of
74.5gb should be more like 2.2gb - can anyone help explain this? Did I
adjust the wrong registry key?

Thanks.