Absolutely right - RAM is detected in whole chunks i.e. either a chip is sound or it isn't. Don't worry about the specifics of bits/bytes/nibbles/kb/mb/gb etc.
As previously stated, 1 kb = 1024 bytes (not 1000!)and 1 mb = 1024 kb etc. Therefore 128 MB = 128 x 1024kb = 130,000 kb+. Depends how the system displays it.
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When I was on motor patrol...