The question is which part of hard drive are deleted files stored?for instance 1gb unallocated space logical on c.drive or the free space primary c.drive.

They aren't "stored" any place special.. they stay exactly where they were before deletion,until they are overwritten.

Smoothy is dead on the only thing that gets deleted is the reference for the file in the File Allocation Table, The file remains until new data is written into the space used to store the deleted file.