When I edit photographs in Photoshop, I have noticed that the final file sizes average between 300mb and 700mb. I try to use smart objects whenever possible, and my files tend to have quite a few layers. I am a bit confused as to why my original 5mb .NEF raw images grow to several hundred megs as I edit them. Is this normal for .psd/.tiff files after edits have been made?
This is how big my .psd files are:
I have a lot in the 300-700MB range (mostly around 300MB). Some of these would be larger (probably a couple of gigabytes) but I flatten the layers occasionally to stop the files getting too large.
Is it excessive? I don't think so, if you have plenty of layers. Quite a few of my bigger files are panoramas. One thing I have noticed it that if you turn off "compatibility mode" when saving the files can be quite a bit smaller.
Keep in mind PSD files are considered "source files", so they're going to be huge however you look at it. Photoshop isn't concerned in the least bit about file size, so it will create 300MB+ files without so much as a warning prompt.
I would argue that if hard drive space is becoming an issue (and hard drive space is cheap these days) your best bet is to have an extra internal drive or external USB drive, or at least a separate partition on your drive for working on PSD files. This way you're not taxing your system disk as heavily, which will extend the life and integrity of your drive.
In my opinion quality is easily ten or twenty times more valuable than disk space if you have it, so I'm willing to let the space be eaten up.
If you want to get fancy, you could use a solid state drive for your system (which would include photoshop's swap space) and a typical hard drive for your storage; resulting in faster editing and plenty of room!
That all said, you always have the option to save to another un-layered format (TIFF/jpg at 100% for example, heck even PDF has a handy lossless ZIP compression option) if you don't need the layers handy. If you keep your original NEF, you can usually recreate whatever changes you need to.