In a Document Library of SharePoint 2007, deleted documents will be put on Recycle Bin first (this is the default setting). SharePoint Recycle Bin works similarly to Windows one - user has their own recycle bin and one can not see others. Items in recycle bins will be permanently deleted after 30 days.
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Read the complete post at http://sharemypoint.wordpress.com/2008/03/28/free-up-database-space-after-deleting-documents/