USB drive not showing full size

I have a 4GB usb drive. Just now i have formatted it with fat filesystem. But after formatting its only showing 200MB instead of 4GB. I am using windows VISTA operating system. I am frightened.

Can anybody suggest any solution?

I've had this problem before. I'm not sure what causes it, but I do have a fix. Here is what you do; be careful, this will format your flash drive or whatever drive you enter in step 3, so proceed at your own caution:

1. Run command prompt as admin.
2. diskpart which will put you into the Diskpart process
3. select disk 1 (or whatever number that corresponds to your flash drive, unless you have other external drives or more than one hard-drive in your computer, this is almost always disk 1; to view all your disks use list disk when within the Diskpart process. It will show the disk # and the size of each disk found.)
4. clean, which removes all partitions from the drive
5. create partition primary
6. select partition 1
7. active
8. format fs=fat32
9. assign
10. exit and exit again to close the Command Prompt window

This is what usually works for me, but as I mentioned before, be careful, I take no responsibility for lost data.

This article might apply to your problem, although your USB is not large enough to fit the description:
Restore factory Hard Drive Capacity When HDD Shows up as 32MB

Here's what typically happens; a large capacity hard drive of between 500GB, 750GB, 1TB and 1.5TB suddenly appears to lose most of its capacity for no apparent reason. In many situations the capacity of the hard drive shrinks to 0.0GB or 32MB (and occasionally 32GB) and becomes inaccessible to the Windows Vista.

What's happening, to put it simply, is that the portion of the hard drive responsible for telling the computer how big it is, is mis-reporting that value. We don't have a good technical explanation for what causes this issue to randomly strike PC users, but suffice to say a portion of the drive firmware known as the LBA48, HPA and DCO records becomes corrupted.

This solution uses the Atola Technology HDD Restore Capacity Tool to fix the firmware - use with caution as it can brick the disk!

If the disk is still under warranty, it might be safer to use it.