After playing around with a few USB-Bootable operating systems I found that some of my once 2GB flash drives were down tremendously in size. For instance I popped in a USB drive and was shocked to see it only had 250MB of space. Not just usableable space but 250MB TOTAL space. After reformatting a few times I checked Disk Manager only to find the space was still there, just "Unallocated". There was no easy way to expand the usable space or combine the two. So I did some Googling and found something that actually works: BootIt. It's meant to create a bootable USB drive but works just as well for regaining the space that was missing. Here's how to get it and how to make it work for you.
1. Download BootIt.exe from http://tinyurl.com/bootitexe
2. Plug in the USB drive that is having the issue
3. Unzip the file and launch the BootIt.exe file.
(If you are using Vista or Windows 7 make sure to run it as administrator)
4. When BootIt loads, select your USB drive under Devices
5. Make sure to select Non-Active under the Partition option
6. Press the Format button
7. When the formatting is complete, remove your USB drive and reinsert it into the PC
8. You will be asked to reformat the drive again, select Yes and your USB drive should now be back to full capacity