Hard drive manufacturers measure space using the normal definition of "mega" and "giga". Thus, 1 megabyte to them is 1,000,000 bytes. Your OS measures it in base 2. Thus, 1 megabyte is a bit more than 1,000,000 bytes (forget the exact number).
Essentially, it's two different ways of stating the same number, but, confusingly, both ways are called the same thing ("gigabytes").
-Erwos