iOS 5, iTunes 10.5 and reported device capacity

This week, as soon as iOS 5 GM was made available to iOS devs, I went ahead and installed it on my iPhone 3GS. Here what I did:

1. Last device sync of my phone with iTunes 10.5
2. Download iOS 5 GM and iTunes 10.5 beta 7
3. Install iTunes 10.5 beta 7
4. Sync my phone with iTunes 10.5 beta 7
5. Upgrade my phone to iOS 5 GM with opt-click on Restore
6. Sync again with iTunes 10.5 GM

In the process, I notice something interesting. The device capacity reported by iTunes decreases after installing iOS 5 by nearly one gigabytes on my 32 gigabytes iPhone 3GS. 

Reported capacity before

Reported capacity after

Why is that?