First of all, "memory" is being misused here. "Memory" refers to the amount of physical RAM, or Random Access Memory in a system. Hard Drive space is usually referred to as "storage space" or simply "the hard drive." You can use whatever you prefer, but just thought you might appreciate some clarification. It helps later on.
As for the hard drive, if you installed Linux on a hard drive, you've forever changed the mechanics of the drive. Penguins are very hungry and so they eat up the available free space and pop an egg out that takes up the rest of the space, thereby eliminating 90% of the drive's usable space. The only way around it is to buy another drive.
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On a more serious note, and the REAL answer, is that Linux OS installs usually partition the drive so that a segment is the OS, the swap, and then any file storage. What you'll need to do is during the Windows 7 setup, delete the partitions on the hard drive using the drive tool during setup. (Click "Drive Options (Advanced)" if you don't see it on the drive setup window) and then you should be able to use the full formatted space. A 250GB drive will generally give you about 230GB of actual disk space to use.
This is the setup window I'm referring to above:
http://howtoformatacomputer.com/wp-content/uploads/install-windows-7-11-drive-options.jpg
