BInary digiT
The binary number system has two digits, 0 and 1. Computers are devices based on the fact that it's easy to have two easily distinguished electrical states, on and off, which corresponds to the 0 and 1 in binary.
Now a single bit can only represent two possible values, 0 or 1. To represent more distinct values, you need numbers made of multiple digits. This works just like the usual everyday base ten number system with ten digits, 0-9. In base 10, one digit can be one of ten distinct values; a two-digit number (00-99) can be one of 100 distinct values, or ten (the number of digits) squared. A three digit number (000-999) can be one of 1000 distinct values, or ten cubed (10 to the third power). And so on. The rule for all number systems is that each extra digit gives you the number of digits in the system times more numbers.
So in base 2, a 2-digit number can represent 2 squared, that is, 2x2 or 4 distinct values (00, 01, 10, and 11); a 3-digit number can represent 2 cubed, that is, 2x2x2 or 8 distinct values (000, 001, 010, 011, 100, 101, 110, 111); a 4-digit number 2 to the fourth power, that is, 2x2x2x2 or 16 distinct values... and so on.
Therefore, a 16-bit binary number can have 2-to-the-16th-power or 65,536 distinct values, while a 24-bit binary number can have 16,777,216 distinct values...
Geesh, I can't believe I'm doing this... I hope this helps.. if it makes no sense, get a basic book on computers and it should have a clearer explanation.
-AlChuck