Very large nails, 1,000 of which would weigh 10 lbs. Four-penny nails are those which are much smaller, as 1,000 of them would weigh only 4 lbs.; two-penny nails, being half the size, 1,000 of them would weigh only 2 lbs. Then we come to the ounce nails, 1,000 weighing only 8, 12, or 16 ounces, the standard unit being always 1,000 nails. Penny is a corruption of pounder, pouner, puner, penny, as two-penny nails, four-penny nails, ten-penny nails, etc., according to the weight of 1,000 of them.
Source: Dictionary of Phrase and Fable, E. Cobham Brewer, 1894
More on Tenpenny Nails from Infoplease: