With Snow Leopard (10.6), Apple adopted the standard usage of terabyte (TB) which equals 1,000,000,000,000 bytes = 10-to-the-12th bytes. Hard drive manufacturers have always specified drive capacity with standard usage which will now match what Mac OS X reports.
WIth Leopard (10.5) and previous versions of Mac OS X, Apple used the binary interpretation of terabyte, (technically a tebibyte) = 1,099,511,627,776 bytes = 2-to-the-40th bytes. Windows also uses binary interpretation.
Under Snow Leopard, drive capacity will be shown per drive specifications. For example, under OS X 10.6, a 1TB drive will appear as a 1000 GB capacity drive (but under OS X 10.5 as a 909 GB capacity drive).
For additional information see http://support.apple.com/kb/TS2419.
What does this mean in real terms? Do I get an immediate increase in storage space?
Formatting or actual capacity does not change at all, only the \f1 reported\f0 capacity because of the change from base-2 to base-10.
Should I reformat the drives before attempting to plug in a previously 10.5 formatted unit into a 10.6 machine or vice versa?
Reformatting is not necessary at all.
What happens if I plug a 10.6 formatted unit into a 10.5 machine or vice versa?
The volume is seen normally. It is completely compatible and can be transparently moved back and forth.
Rod – DCFCPUG