By early 2011 all hard drives that come onto the market will use an “advanced format” that changes how they go about saving the data people store on them. It will mean that hard drive makers can produce bigger drives that use less power and are more reliable. But it will not run on Windows XP which has a hard-drive formatted into blocks 512 bytes in size.
All file systems used by Windows organize your hard disk based on cluster (or allocation unit) size, which represents the smallest amount of disk space which can be allocated to hold a file.
So that also represents wasted space over and above this sector size mentioned, if the cluster size is 4K then there are 8 of these sectors to the cluster and in theory 7 of them would be wasted if the file is less than 512bytes. Unless these guys are talking about cluster size, which I doubt.
Any half decent partitioning tool can change the cluster size, which I did on my system to better suit the file sizes and to minimize wasted space. XP can theoretically support HDDs up to 256TB with a cluster size of 64KB, none of those around.