Manufacturers have routinely 'rounded up' hard drive sizes to sell better. It is quite likely that the drive is a 3.99 GB drive with a "4.0 GB" sticker on it.
Also, the definition of a megabyte/gigabyte differs if they count a megabyte as 1024KB or as 1000KB.
As for the system running low on disk space, what does the drive properties report for disk space free?
Have you run chkdsk lately? The drive could be full of unusable files.
How are you paritioned? Dell used to be partition happy around the time 4 GB drives were sold - your system partition could be full while you have an empty d: drive