This item is from the Yet Another Enhanced IDE/Fast-ATA/ATA-2 FAQ, by John Wehman and Peter den Haan with numerous contributions by others. (v1.92).
The word "mega" is an ISO prefix designating a factor 1,000,000. A proper megabyte is 1,000,000 bytes. Because computers use binary technology and like working with powers of two, 2^20 bytes, that is 1048576 bytes, is also usually referred to as a megabyte.
Which of the two types of megabyte you're dealing with depends on the context. For storage devices, a megabyte usually means 1,000,000 bytes. Some software uses "binary" megabytes, though, and will show a smaller capacity than the drive label says! This includes most BIOSes.
This FAQ uses megabytes of 1048576 bytes throughout.
 
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