Binary vs Decimal

     One of the most confusing problems regarding PC statistics and measurements is the fact that the computing world has two different definitions for most of its measurement terms. Capacity measurements are usually expressed in kilobytes (thousands of bytes), in megabytes (millions of bytes), or gigabytes (billions of bytes). Due to a mathematical coincidence, however, there are two different meanings for each of these measures.

      Computers are digital and store data using binary numbers, or powers of two, while humans normally use decimal numbers, expressed as powers of ten. As it turns out, two to the tenth power, 2^10, is 1,024, which is very close in value to 1,000 (10^3).  Similarly, 2^20 is 1,048,576, which is approximately 1,000,000 (10^6), and 2^30 is 1,073,741,824, close to 1,000,000,000 (10^9). When computers and binary numbers first began to be used regularly, computer scientists noticed this similarity, and for convenience, "hijacked" the abbreviations normally used for decimal numbers and began applying them to binary numbers. Thus, 2^10 was given the prefix "kilo", 2^20 was called "mega", and 2^30 "giga".

Information from: http://www.pcguide.com/intro/fun/bindec-c.html