"dosent that double the size of your files?"
No. The addition is done at individual byte level. Remember that most files on your computer aren't plain text, but contain non-ascii data. Your jpeg or mp3 file will contain millions of bytes of data, all within the range of 00 to FF (0 to 255).
The key is (presumably) added to these individual bytes to change the value of that byte.
If we use your example though, lets assume that your data is plain ASCII in a text file.
Looking at the ASCII values for both the original data and the key, we get something like this...
ASCII
t - 74
e - 65
s - 73
t - 74
i - 69
n - 6E
g - 67
1 - 31
2 - 32
3 - 33
m - 6D
y - 79
k - 6B
e - 65
y - 79
1 - 31
Adding the key to the data on a byte-by-byte basis, we're doing this:
(t+m) (e+y) (s+k) (t+e) (i+y) (n+1) (g+2) (1+3) (2+m) (3+y)
... or in hex:
(74+6D) (65+73) (73+6B) (74+65) (69+79) (6E+31) (67+6D) (31+79) (32+6B) (33+65)
That would ultimately give you this:
(E1) (D8) (DE) (D9) (E2) (9F) (D4) (AA) (9D) (98)
Your plain text message would now appear as áØÞÙâŸÔª ˜" when you opened your text file.
* - This is a quick explanation - the ASCII codes, or the additions may be completely wrong.