New Nano Shows only 900MB free space...Why?  Where is the other 100?

My brand new nano show that there is only 900MB free for music, not the 1GB. Why? It is only holding 181 songs, nowhere near the 240. Any ideas?
Nano 1GB   Mac OS X (10.4.7)  

only 900MB free for music, not the 1GB.
The apple knowledge base document shows why you lose around 100mb to 200mb on every ipod
http://docs.info.apple.com/article.html?artnum=60955
In iPod's About menu, the hard disk size is reported as slightly less than the technical specifications for the iPod. The same is true if you connect iPod to your computer in disk mode look at the info or properties window for the disk.
Why the difference? Most hard disk manufacturers measure disk size this way: 1 MB = 1 million bytes (1000 * 1000). A 4 GB disk, therefore, is one that holds 4 billion bytes. Computers, including Windows computers, Macintosh computers and iPod, measure disk size this way: 1 MB = 1 048 576 bytes (1024 * 1024). The difference in these two calculations is what causes the drive to appear as 3.7 GB on a computer, but actually be a 4 billion byte disk.
The ipod operating system and games etc will only account for a miniscule amount of the used space.
This difference wont change how many songs you can get onto your ipod. Bear in mind, the song average advertised on the ipod is based on 4 mins per song, encoded at 128kbps in AAC format.
It is only holding 181 songs, nowhere near the 240.
Bear in mind that the song limit advertised is based on 4 minute per song, 1MB per minute, encoded as 128 kbps in AAC format.
Check the encoding of your songs. To do this, right click one the sorting columns in iTunes tick bit rate, then click this new column to sort the songs by bit rate. Any songs that are encoded at higher than 128 kbps will be causing excess space to be used for storage. To change the bit rate of these songs you can convert them to AAC format (sound quality will be lost). Or you can reimport them from CD/Computer once you have changed the import settings as detailled below, but that could be time consuming.
To convert go to the edit menu, select preferences, click the advanced tab, and select importing.For best song capacity on the iPod, make sure that the encoder is set to "Import using AAC encoder", and "High quality 128 kbps". Hit OK. Then collect together all the high encoded songs and select them all (click the top one and hold shift, then click the bottom one). Right click the highlighted area and go to "Convert selection to AAC". This could take a while if there are many songs.
Once complete, go to the Edit menu, and select "Show duplicate songs". Delete all the "old" songs, recognisable by their bitrate, format or size. Again, to show these, right click a sorting column, and tick the respective ones.
Once this is done, update the iPod.
If your songs are all changed into 128kbps AAC and are mostly all around 4 mins long, then you should get very close to the song limit advertised

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