I'm trying to use the avr-size utility...
The operating system does not know where to find executables unless either1.
The file is in a directory defined by the %path%
You give it the complete path name as part of the command.
And, yes, you are correct: avr-size.exe
(and other avr-stuff) is under the arduino installation directory:
Append that directory to your %path%
. (In Windows XP, you can set and modify environment variables from the Control Panel->System->Advanced->Environment Variables box. I don't know exact details for later versions of Windows.)