The wii nand is basically a solid state flash disk of 512MB
If you emulate the nand on an usb drive, like in case of uneek and uneek2o, than the contents of the nand are also read and written
to and from the usb drive. If you install a channel, it's files are copied to the nand. Since nand access is rerouted to the harddisk, they are now copied over there as well. So, they will occupy space on that harddisk. If it run's out of space, the behavour is unpredictable, as for instance neek doesn't report to the wii that the harddisk is running out of space.