Insufficient disk space when restoring a small backup

Probably because the backup is compressed, or because there is a very large log file that doesn't need to be part of the backup itself, or because the data file itself has been cleaned out - the backup is only comprised of pages that contain data. But when restored, it still has to expand the data file to its original size, even if most of it is empty.

Show us what the size column says when you run:

RESTORE FILELISTONLY FROM DISK = '[path]\whatever.bak';