MarkR and Bglad -
NO, NO, NO! This issue has been around ever since we first started seeing 10MB and 20MB PC hard drives, circa 1982, before you guys were probably even born. I remember having these same questions with my first hard drive, the Seagate ST225 20MB model (that sucker costed US$300!).
The "120GB" hard drive is indeed 111.67GB. It's the Hard Drive manufacturer's who have "redefined" what a Kilobyte, Megabyte, and Gigabyte mean. These are well-defined, exact units of measure based on the x86 microprocessor definition of a byte (using binary arithmetic), not what some marketing dweeb has deemed them to be.