Dear Colin,
please dont get me wrong, but it seems that you could need some basic information about digital audio, to make sure that your expectations are met by your gear.
The file size you experience is completely normal for uncompressed, linear audio. As a rule of thumb, 1 minute of a stereophonic audio signal results in about 10 MB of audio data when digitized at 44.1 kHz sampling rate with 16 bit dynamic resolution. The higher the sampling rate, the better are the resolution of the frequencies (here, the rule of thumb is "the highest possible frequency is half of the sampling rate"). Higher sampling rates result in larger files, of course; the same will happen with higher bith-depths (like 24 bit, usually the minimum used during music production today).
What you _seem_ to expect are the very small sizes of the typcial, data-reduced (and thus not seldom bad-sounding) formats like MP3, AAC and the like.
Dithering has nothing to do with file-size, BTW. Dither is just added noise (at a very low volume) to mask the errors of truncation, for example when changing the bit-depth from 24 to 16, and it is applied at the very final stage before burning audio to CD-A, or converting audio to one of the data-reduced formats outlined above.
You can get good information on topic like that online, for example here:
-> http://www.indiana.edu/~emusic/etext/toc.shtml
...especially this chapter:
-> http://www.indiana.edu/~emusic/etext/digital_audio/chapter5_file.shtml
Another good introduction to the differences between digital audio formats:
-> http://arstechnica.com/articles/paedia/The-AudioFile-basicsof-uncompressed-digital-audio.ars
General basic information can be found on many other sites of the Web, for example here:
-> http://www.hammersound.net/audiobasics/audiobasics.html
... or here:
-> http://compreviews.about.com/cs/soundcards/a/CompAudioPt1.htm
... just to give you an idea. Google will reveal lots of in-depth discussion of each topic.
HTH!
/Dietz - Vienna Symphonic Library
