Gary is correct - as the article Kelly referenced states:
"At present, the hard disk drive industry measures disk capacity as 1MB = 1,000,000 bytes (1000 * 1000) . For example, this is defined in Quantum, Seagate, and Western Digital's product specifications and documentation (this is becoming an industry standard). For more information, visit these companies' respective web sites. The Macintosh Finder measures disk drive capacity as 1MB = 1,048,576 bytes (1024 * 1024). With regard to the above example, the 4 GB hard disk included in some Macintosh computers has a total of 4000776192 bytes of storage capacity. By industry definition this is a 4 GB hard disk.
The Mac OS Finder shows this space as follows if you divide the total bytes by 1,048,576 bytes: 4000776192 bytes = 3815.4375 MB = 3.7 GB
The disk drive industry measures drive capacity as follows if you divide the total bytes by 1,000,000 bytes: 4000776192 bytes = 4000.776192 MB = 4.0 GB."
My 120 GB Western Digital formats out to 111.79GB - and if you do the math, 120GB translates to about 114.44GB. So, 2.65GB is lost to formatting. My IBM drive, which is 46.11GB according to IBM formats out to 42.95 GB, with about 1.02GB lost to formatting after you do the math to convert to Apple's figures.
So, all in all, about what one would expect. Bigger drive...more formatting.