As a test I decided to create a simple \"Hello world\" app in Delphi using Delphi 4, 5, 6, 7, 2005, 2010 and XE3. The app is nothing more than a TForm, a TButton with an On
You may have done a only a compile after changing to 'Release' configuration. Try to do a rebuild (not recompile). This will truly activate the Release configuration on the executable, and perhaps a smaller file size.
For me (Delphi XE2), the size reported by Windows for the same app (Release configuration) is:
1.52 MB (1,600,512 bytes)