single instance storage

Vista and newer versions of NTFS apparently have single instance
storage functionality. I've done repeated searches and have not found
any useful information about how or if it actually works in Vista. I
would like to use single instance storage to reduce the amount of disk
space I use by having different branches of the same source code on my
machine at the same time. In other words, I might have 3 directories
over 1 GB with 95% of the files within identical. According to my
understanding, Single instance storage should recognize the identical
files and only store them once. I performed a test last night by
creating a copy (on a single drive) of a 4 GB file. If single instance
storage was enabled, I would expect this to be a trivial operation,
since the only data written to disk would be information to link the
new file to the existing location of the data on disk. This was not
the case though and it was apparent that it was writing 4 GB to disk.
I realize that one use of single instance storage is for backups and
disk images, however I don't think it supposed to be limited to only
those functionalities.

I'm also curious about whether single instance storage can operate on
a sub-file level, for instance one large video file and several
smaller videos that have been cut from the original (without any
reencoding), 99% of the data contained in each small video already
exists in the large file, can single instance storage de-duplicate
this?

Can anybody help?