Im thinking of getting it on demand and giving my copy of skyrim to my friend who is in a bit of a bad luck lately financiallly speakiing. But i have a question why is it that when I had the game installed on hard drive that it only used up about 4.8gb of space but if I want to get the on demand it only will use up 3.8 gb of space can anyone answer the question for me please?

Games on Demand (Xbox) is basically disc images with the copy protection coming from account or console-ID authentication rather than a disc in the DVD reader. (Notice that you never see multi-disc games in GoD. My guess is they haven't figured out how.) The install size of Skyrim from the disc is 3.8 GB.