I was asked the other day what the difference was between an bit and a Byte when measuring broadband speeds and I found a good article by Jack Schofield from the Guardian which explains the difference:
Communications speeds are usually given in bits per second because bits are what the communications company is supplying. This can include start bits, stop bits and other essential overheads. (You wouldn’t expect an airline to weigh your luggage without including the weight of the suitcase.) What you do with the bits is a different matter. For example, it’s possible to encode a single letter in five bits (Telex), 7 bits (ASCII) or 16 bits (Unicode).
Usually, the receiving machine will convert the bitstream into 8-bit bytes. This leads to an apparent loss because bits are counted in decimal (powers of 10) whereas bytes are binary (powers of two). It actually takes 1,048,576 8,388,608 bits to make one megabyte.
An “8 meg” broadband connection is nominally 8 million bits per second, but will be closer to 7Mbps after overheads. Still, this is not far off one megabyte per second. You can download a 100 megabyte file in about 120-140 seconds, ie a little over two minutes.
The convention is to denote bits by using a small b (Mb, Gb) and bytes by using a capital (MB, GB).
More at: http://www.guardian.co.uk/technology/askjack/2008/apr/03/withbroadbandyourepayingfo