A bit is a binary digit, taking a value of either 0 or 1 (
http://en.wikipedia.org/wiki/Bit )
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A byte (pronounced "bite") is the basic unit of measurement of information storage in computer science. (
http://en.wikipedia.org/wiki/Byte )
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The use of a byte to mean 8 bits has become nearly ubiquitous... even more the word octet (meaning "group of eight") comes from the Latin and Greek numerical prefix octo, meaning eight.
In europe bytes is often translated as 'octets' ... In computing, an octet is a grouping of eight bits. (
http://en.wikipedia.org/wiki/Octet_(computing) )
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As such, it is often used where the term byte might be ambiguous. For that reason, computer networking standards almost exclusively use octet. It is prominently used in Request for Comments (RFCs) published by the Internet Engineering Task Force. The earliest example is RFC 635 from 1974. In France, French Canada and Romania, the word octet is commonly used instead of byte (in the 8-bit sense); a megabyte (MB) is called a megaoctet (Mo).
A megabit is a unit of information or computer storage, abbreviated Mbit (or Mb).
1 megabit = 106 = 1,000,000 bits which is equal to 125,000 bytes.
A binary counterpart of the megabit, the mebibit, refers to the binary quantity 10242 bits. Standard industry practice in RAM and ROM manufacture is to use the Mb abbreviation in reference to this binary quantity. For example, a single discrete DDR3 chip specified at 512Mb invariably contains exactly 229 bits = 536,870,912 bits = 512 Mibit of storage
In the 16-bit games console era, the 'megabit' became a commonly-used measure of the size (computer data storage capacity) of games cartridges. This "megabit" actually equals one mebibit (Mibit)...The actual rule is: 8 bits = 1 byte. Therefore a 4 megabit cartridge had a capacity of 512 KiB, an 8 megabit cartridge held 1 MiB of data, and so on.