How to regain 1TB capacity ?

Most, if not all external hard drived do not need a driver. Connect the drive and power, turn it on. There is no need to use the backup program that comes with the drive. Use Windows backup that comes with Windows 7.

Check the drive partitions. You probably have a small partition that is separate from the main partition and it contains drivers and files needed for various operating systems to use the drive properly. It is best if you use drive partition software for this but that is the most common reason for it to show a difference. The second most common reason is the drive wasn't formatted to capacity. I have this drive and I know for a fact the backup software and and driver software are stored on a small partition on that drive which reduces the amount of the main partition.

1.check the backup software and see the schedule status for it
2. When data is be transferred the light should be blinking
When idle the light should be steady.

You will probably need to install the drivers that came with the drive for Windows to see it. Check out the instructions that came with the unit and it will walk you through installing drivers and connecting the drive to your computer.

I can't diagnose the drive issue... but I can offer a reliable and trustworthy data recovery solution that I had to use a year ago. It's Seagate's do it yourself data recovery and will work on your WD drive. So if you can't resolve the issue otherwise, consider this as a recovery option...

https://services.seagate.com/diysoftware.aspx

it seems a problem with the driver, try plugging it onto a different computer. If that works, reinstall the driver.

This is a known problem with these drives. Disabling USB legacy support in your Bios should solve the problem., it did in my case but at the expense of not being able to boot from a USB device. Definitley a problem with their enclosure or drive.

Ken D

Check in the device manager to make sure the drivers are still there.

DID you chk the data transfer speed ??