Those sellers modified firmware to show false values, and fact that PC recognizes advertise values in "Bytes" because of those change is a good indication of their intentions to deceit.
There are some cases reported that one advertised as 4GB being 1GB in reality. That does not fit "1 byte = 8 bit excuse'. It should be 512MB, if it was 'mistaken'. (Well, there's no 4GB model in S1 MP3 or so called Chinese MP4 player as of Nov 06 that I know of.).
It is a common understanding that lower case 'b' is used in for the bits, and upper case 'B' is used for Bytes.
So, if the seller advertised the memory size as x GB, it is hard to argue that the ad ment Gb.
For case of gb, SI prefix giga is usually noted with uppercase 'G', and interpretations of 'gb' can vary...
It could mean anything, but it does not take too much to see most of the buyers take it as 'GB'.
anyway, for the cases of those advertised as xGB and ended up with something short of it, file a complaint with eBay.
So far, the talk of S1 MP3 player enthusiasts is that eBay don't do s#!t about this, but file that anyway.
PayPal, an eBay Company (LOL), will help you as good as eBay does. Your best bet is to contest it against your credit card, if you have used credit card.
Lesson learned. Paypal does not protect you from frouds that well.
Harsh, but a good lesson.