The basic unit used in computer data storage is called a bit (binary digit).  Computers use these little bits, which are composed of ones and zeros, to do things and talk to other computers.  All your files, for instance, are kept in the computer as binary files and translated into words and pictures by the software (which is also ones and zeros).  This two number system, is called a "binary number system" since it has only two numbers in it.  The decimal number system in contrast has ten unique digits, zero through nine.

But although computer data and file size is normally measured in binary code using the binary number system (counted by factors of two 1, 2, 4, 8, 16, 32, 64, etc), the prefixes for the multiples are based on the metric system!  The nearest binary number to 1,000 is 2^10 or 1,024; thus 1,024 bytes was named a Kilobyte.  So, although a metric "kilo" equals 1,000 (e.g. one kilogram = 1,000 grams), a binary "Kilo" equals 1,024 (e.g. one Kilobyte = 1,024 bytes).  Not surprisingly, this has led to a great deal of confusion.

In December 1998, the International Electrotechnical Commission (IEC) approved a new IEC International Standard. Instead of using the metric prefixes for multiples in binary code, the new IEC standard invented specific prefixes for binary multiples made up of only the first two letters of the metric prefixes and adding the first two letters of the word "binary". Thus, for instance, instead of Kilobyte (KB) or Gigabyte (GB), the new terms would be kibibyte (KiB) or gibibyte (GiB). The new IEC International Standards, which are not commonly used yet, are included below.

Here's a few more details to consider:

File Storage Capacity by Bits and Bytes
  bit byte Kilobyte Megabyte Gigabyte
bit 1 8 8,192 8,388,608 8,589,934,592
byte 8 1 1,024 1,048,576 1,073,741,824
Kilobyte 8,192 1,024 1 1,024 1,048,576
Megabyte 8,388,608 1,048,576 1,024 1 1,024
Gigabyte 8,589,934,592 1,073,741,824 1,048,576 1,024 1
Terabyte 8,796,093,022,208 1,099,511,627,776 1,073,741,824 1,048,576 1,024
Petabyte 9,007,199,254,740,992 1,125,899,906,842,624 1,099,511,627,776 1,073,741,824 1,048,576
Exabyte 9,223,372,036,854,775,808 1,152,921,504,606,846,976 1,125,899,906,842,624 1,099,511,627,776 1,073,741,824
Zettabyte 9,444,732,965,739,290,427,392 1,180,591,620,717,411,303,424 1,152,921,504,606,846,976 1,125,899,906,842,624 1,099,511,627,776
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     File Storage Capacity by Powers of Two (Base 2)
      bit       byte   Kilobyte Megabyte Gigabyte Terabyte Petabyte Exabyte Zettabyte Yottabyte 
bit 2^0 2^3 2^13 2^23 2^33 2^43 2^53 2^63 2^73 2^83
byte 2^3 2^0 2^10 2^20 2^30 2^40 2^50 2^60 2^70 2^80
Kilobyte 2^13 2^10 2^0 2^10 2^20 2^30 2^40 2^50 2^60 2^70
Megabyte 2^23 2^20 2^10 2^0 2^10 2^20 2^30 2^40 2^50 2^60
Gigabyte 2^33 2^30 2^20 2^10 2^0 2^10 2^20 2^30 2^40 2^50
Terabyte 2^43 2^40 2^30 2^20 2^10 2^0 2^10 2^20 2^30 2^40
Petabyte 2^53 2^50 2^40 2^30 2^20 2^10 2^0 2^10 2^20 2^30
Exabyte 2^63 2^60 2^50 2^40 2^30 2^20 2^10 2^0 2^10 2^20
Zettabyte 2^73 2^70 2^60 2^50 2^40 2^30 2^20 2^10 2^0 2^10
Yottabyte  2^83 2^80 2^70 2^60 2^50 2^40 2^30 2^20 2^10 2^0
New IEC Standard
bit bit 0 or 1
byte B 8 bits
kibibit Kibit 1024 bits
kilobit kbit 1000 bits
kibibyte (binary) KiB 1024 bytes
kilobyte (decimal) kB 1000 bytes
megabit Mbit 1000 kilobits
mebibyte (binary) MiB 1024 kibibytes
megabyte (decimal) MB 1000 kilobytes
gigabit Gbit 1000 megabits
gibibyte (binary) GiB 1024 mebibytes
gigabyte (decimal) GB 1000 megabytes
terabit Tbit 1000 gigabits
tebibyte (binary) TiB 1024 gibibytes
terabyte (decimal) TB 1000 gigabytes
petabit Pbit 1000 terabits
pebibyte (binary) PiB 1024 tebibytes
petabyte (decimal) PB 1000 terabytes
exabit Ebit 1000 petabits
exbibyte (binary) EiB 1024 pebibytes
exabyte (decimal) EB 1000 petabytes
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