Yeah, the properties window is confusing the issue. When it says "capacity" it's actually listing "the total useable space after reserving some for the filesystem". To check the actual capacity, right click the drive and go to Format and see what that says (you don't have to actually format the drive to check this).
For example, formatting a 1GB drive with the default sector sizes (actual capacity 977MB) with FAT gives a total useable capacity of 977MB, whereas FAT32 gives a total useable space of 973MB. For more details this looks like a pretty good summary of the pros/cons of the different filesystems:
http://forum.notebookreview.com/har...-fat16-fat32-ntfs-exfat-usb-flash-drives.html
Mind you, this is just my guess as to why the capacity changed. When you formatted the drive it SHOULD have defaulted to keep the same filesystem, so the "capacity" shouldn't have changed. But, hey, stranger things have happened.