How come my testnet chaindata folder is so big? I'm running Ethereum Wallet 0.8.7. Deploying little test smart contracts. Actual chaindata size is 9.4 GBs.
Chances are you're looking at the public testnet, Morden. It's a full blockchain, so gigabytes of data isn't surprising--it's not just you, it's everyone else's little smart contracts!
If you need a private testnet, you'll have to manually set one up--but it is relatively simple to do so. Browser Solidity will create one for you in your browser. testrpc also creates one instantly, but I don't know how well it meshes with Ethereum Wallet. If all else fails, you can set up a real, honest-to-goodness private blockchain on geth with the instructions here, then Ethereum Wallet will definitely connect.