They do not make 10GB hard drives, ususally when you first purchase the console it says 12GB because it already comes with some videos and other crap. Try looking around the HDD and deleting stuff and you will see there is much more space.
my 20 came formatted as a 14... i completely got rid of the shit microsoft puts on it and i was @ 18 i think... now i'm back down to 3... to many demos/tunes/saves...