Why did compacting my Outlook PST file just double the size of the file itself?

"Basically put, you could create a new PST file and manually drag and drop everything over into it. This would then be set as your new delivery file and the old rather chunky PST file would be closed/deleted.

Firstly, either disable sending and receiving in Outlook or simply kill your internet connection temporarily. This will prevent new emails going into the old PST file and vanishing during the move process.

I would recommend using the right-mouse button to drag and drop, selecting Copy instead of Move. That way, you can backtrack if anything goes wrong at any point.
Ensure you are in the Folders view so that you can see everything including contacts, calendar, etc etc. Drag and drop everything across into the new PST file. Once you are sure that everything is in the new PST, close Outlook.
Open the Mail applet from Control Panel and change the mail delivery to point to the new PST file.
Open Outlook and close the old PST file from the left-hand side of Outlook by right-clicking it.

As for the why, I would also be interested to know. My initial stab in the dark is that the compress function is similar to defragmenting a disk. Chunks of the PST file are reordered in such a way that they are all contiguous, thus removing the gaps due to deleted emails, etc, making the overall size of the PST file smaller. My guess is that all the chunks were moved beyond the original size of the PST file, ready to be copied back in the right order without the gaps... right before the process was cancelled. I am sure someone will be more than happy to correct me if I am completely wrong!"

Something you may want to consider for automatic alert emails is to set a custom rule to move them to a folder. Then you can auto-archive that folder, but instead of moving them, choose delete and a sufficient retention period. No longer will your PST be filled with useless alerts.