The capacities listed are the absolute number of bytes available on a drive. For instance, a 4GB drive would have 4,000,000,000 bytes of space available on the disk. The problem is that PCs use factors of 2 for everything. As it turns out, the computer does not use groups of 1000 to store data, it uses groups of 1024 (2^10). Take 4,000,000,000 and divide it by 1024 bytes and you actually get a number of 3.906GB instead of 4.000GB. To better express this, computer professionals have started using different units such as GiB (gee-bee-byte), MiB (mee-bee-byte), and KiB (kee-bee-byte) to express when they mean groups of 1024 vesus groups of 1000.
If you have a 160GB hard disk, it'd actually be 156GB before it's formatted. Then once it's formatted, you've lost some more due to much more complex issues to discuss like partition tables, cluster size, reserved space, and the like.
With a 500GB drive, formatted NTFS with 32K clusters and no waste reservation, I have a usable space of 465GB.