wow, the 7 pounds i gained where all muscle and i even lost some fat
and i keep reading that for every 10 pounds you gain, only 8 is muscle
Hard to say really. It's a whole different thing when you are fat (high body fat, let's say >30%) versus lean (say 5-7% bodyfat). In high bodyfat trainees, it has been shown that it is possible to build muscle and lose fat (since there is an abundance of fat deposits) simultaneously. Unfortunately, this is not something that is reproducible when the subjects are already lean ( <12%)
For trained/experienced lifters (this assumes not high body fat), when you gain 10 pounds, for example, you won't really know how much is fat, versus how much is muscle. You'd need to measure your bodyfat % as well, and have the reference "before" figure, to start to figure out what part of that 10 pounds is muscle vs fat. However, as long as bodyfat% is not high (around 10-15%), small increases in bodyfat% aren't easy to detect, but changes in musculature are, and this leads many people to believe that most of what they gained are lean muscle rather than fat. Hence, people all over forums worldwide would swear they were lean when they started, and the regimen was so good that they gained ALL muscle, and they were clean (no steroids) - this is not true, since you can't gain all muscle (unless the subject started out very fat - this is something that's seen often in "the biggest loser" shows) and no fat when you start out lean in the first place, but the results looked good nonetheless.
For example, if you started out at 7% bodyfat, you gained 15-20 pounds, and your bodyfat% increased to maybe 10-12% (but this, bf%, is something you don't see, unless you also always take your bf% whenever you measure your weight), when you look in the mirror, you won't look fat, in fact you'd look great (and huge, probably), so as far as you are concerned you gained mostly muscle and you end up telling all your friends (real world and forum alike) that your training was so productive and you gained all muscle. It's not exactly true, but that's the perception, and this myth perpetuates itself over and over. It's especially seductive and easy to believe because, deep down, this is what everybody wishes were true - that muscle can be built without getting fat, some sort of holy grail.
wouldnt gaining 50 pounds make you fat then, cause that would mean you would gain 25 pounds of fat
Yep. Bulking makes you fat. But it also increases your muscle mass. It's unavoidable. That's why bulking and cutting cycles exist. If it's possible at all to always just build muscle and very little, insignificant fat, then cutting cycles would not exist at all.
It's a mix of genetics, diet, training, starting bodyfat%, and "state" (untrained / trained, conditioned/deconditioned). When all factors are in your favor, you can gain a lot of muscle while even losing fat (in case of high bodyfat%) or gain a lot of muscle while not getting too fat too fast. Most of the time, most people just have to do bulking and cutting cycles alternately as needed.