I don\'t know very well about RAM and HDD architecture, or how electronics deals with chunks of memory, but this always triggered my curiosity: Why did we choose to stop at 8 bi
Not all bytes are 8 bits. Some are 7, some 9, some other values entirely. The reason 8 is important is that, in most modern computers, it is the standard number of bits in a byte. As Nikola mentioned, a bit is the actual smallest unit (a single binary value, true or false).
As Will mentioned, this article http://en.wikipedia.org/wiki/Byte describes the byte and its variable-sized history in some more detail.
The general reasoning behind why 8, 256, and other numbers are important is that they are powers of 2, and computers run using a base-2 (binary) system of switches.