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).
Good question. The basic answer is that the advertised modes are theoretical transfer rates.
This is the case at two levels. First and foremost, the oft-quoted rates do not represent the speed at which the drive can actually read data from, or write data to, the magnetic media. Instead, they give the speed at which data can be exchanged between the drive's buffer cache and the CPU. While the latter gives the more imposing figures, the former has greater impact on real world performance. "It is really as if the government had had a speed limit of 250 km/h on the highways, then raised it to 1600 km/h and tried to impress you by telling you that now you can drive faster"--Aaron Bilger (firstname.lastname@example.org).
Second, even once you accept that these transfer rates can be achieved only when the drive happens to have the data ready in the buffer cache, these figures are pretty optimistic. Realistically, drives do more than just give data to the host out of the cache. For each sector transferred to the host, the drive's controller needs to get one from the media; internal controller processing, table updates, positioning and buffer cache management all take some of the controller's attention. All reduce the throughput from the cache to the host.
On top of that, depending on the benchmark used to determine the 'throughput', the rate can vary from 3MB/s to 30MB/s and upwards, all on the same drive. This depends on what the utility actually measures, how it measures it, and even where on the drive it measures it (different zones on the same drive can vary up to a factor two in speed). Plus, system configuration (MHz CPU, RAM, harddisk cache, processor cache) make a difference as well.
Bottom line is, whatever benchmark you use, you will not 'see' the advertised transfer rate. The real test is how well it improves your day to day applications. The rest is just fluff.