Essentially correct... To
any hardware manufacturer, 1Gb equals 1,000,000,000 bytes. Apple's playing by the same rules here as the rest of the industry, and everybody's been doing it for
years. In fact, I seem to recall a lawsuit about two years ago where some computer owners in California attempted to sue some of the computer manufacturers over false advertising. I don't think it ever actually went anywhere...
Further, even if Apple was really concerned about the software definition of a Gigabyte, they'd still be limited by what the hard drive manufacturers can provide, and selling them as "18.5Gb" and "37.5Gb" iPods just doesn't make sense from a marketing point of view.
In fact, there has actually been an IEC standard in place since the late nineties that
technically defines a "kilobyte" as 1,000 bytes, and uses the term "kibibyte" to refer to 1,024 bytes (ditto for Megabyte/Mebibyte, and Gigabyte/Gibibyte). So
technically, the hard drive manufacturers
are using the correct terminology... It's the software developers that aren't...
This terminology has never really caught on, however.