Hard Drive space offered by VPS providers

Hi,

I have seen some budget providers(yes quite a few on WHT and may be there are some at LEB too) who offer 1 GB VPS with 100+ GB space but node setups they normally have are:

Xeon E3 12xx v2 32 or 64 GB RAM 2 X 2000 GB SATA in Soft Raid 1(And the datacentre doesnt allow additional drives)

So what I fail to understand is

1.Do they not put more than 20 clients on the node?

                              OR

2.They oversell or over-committ HDD space somehow?

3.If they oversell HDD space, is it even possible wih XEN, KVM or any other virtualization to do so?