I don't know how much accuracy you need, Incarnate, but there are two different approaches at work:
Data size (the amount of memory required on a storage device to store a particular file): 1kb = 1024 bytes. This is because computers are binary devices and '1 kilosomething' is 2 to the power 10 of something; '1 megasomething' is 2 to the power 20 of something. If you have a Windows system, you might see the RAM checking its own capacity at boot up. If you have 64Mb of RAM, you'll see that the counter reaches about 67000 (because it's 64 x 1048 kb)
Data transfer (how fast data moves from a storage device to another device): 1Mb = 1000 Kb etc. This is reassuringly decimal, because it is simply a human expression for the speed of data transfer. It's also usually either an average value or a maximum value. Try achieving 7Kb per second on a 56Kbit modem (which is what should be possible) and you'll see what I mean.
Incidentally, various organisations have asked that 'k' indicate a binary kilo, while 'K' should indicate a decimal kilo (as I've attempted to abide by in the above), but it's far from being an accepted standard.
Best o luck
Norman