I will assume a few things: 1. you are running a pre- OS 8 System (probably the 7.1 on the HD itself), and/or both drives are formatted as HFS, not HFS+. 2. The CF card is a few GB in size (likely 2, since I believe that is the maximum that 7.1 could address - I think) or larger if you are starting up with 8.1 on the CF.
In this scenario, the reason that your stuff ballooned is that the blocks of your much larger CF drive are much, much larger in size than on your HD. Put it this way: the stuff you copied is not actually now made up of more data, but the space that holds it is necessarily bigger. Imagine that you drove a Mini Cooper. The 160 MB drive has parking spaces the size of the Mini, allowing you and other drivers to park tightly together. However, since the CF card has parking spaces the size of a coach bus, AND you can only park one car per space, your Mini now takes up an entire parking spot with a lot of free space left. That free space cannot be used because it is within a physical block.
Though long-winded, here is a good explanation from the Mac Secrets book, 5th edition:
"Earlier in this chapter, we pointed out that files on your disk actually waste space if their sizes don’t exactly fill up the blocks on which they’re stored. Remember, under the Mac’s old Hierarchical File System, every drive, no matter what its size, is divided up into a maximum of 65,536 uniformly-sizedblocks — and therefore, on larger drives, the standard block sizes escalate.
Therefore, the smallest any file can be on any disk is one block. A 9K SimpleText file on a four-gig drive takes up one block — 65K — and wastes 56K! When you multiply that space by the thousands of files on your drive, you can see that you wind up wasting a considerable chunk of disk space."
If this is really bothersome, one way you can get around this is making a 160 MB disk image and dropping the stuff in there, then copy the image to your CF drive. Or, re-format the CF drive as HFS+. That will deal with your ballooning space issue, but the trade-off is the disk won't be able to be read by pre-Mac OS 8 systems.