Why does my iTunes have more storage than my iPhone?

I'm trying to download iOS7 on my iPhone 4 8gb but it said I needed 2.9gb to download it. I cleared 2.66gb on my itunes on my computer but on my phone it says i only have 2.7 and i have almost everything gone! No pictures, less than 230 songs and only 3 apps! Why isn't my storage capacity the same on both devices?

ITunes and the iPhone have issues with the unaccounted "Other" portion, it seems to be forever changing when plugging in the phone.

I recommend backing up the iPhone through iTunes (Right-Click - Backup); (to save all msgs, contacts, settings.)

Then: Restore the phone to factory default while plugged into the PC, this should also update to iOS 7 in the process of the restore.

Finally: Restore the backup created earlier. You will find it under a tab in the iTunes Preferences; and resync all music, photos, apps etc.

It's a BIG job I know, and it sucks, I've done it many times, but sometimes I get so fed up, I just resort to it.

It will take about 3-hours to complete the process, including downloading iOS 7.

Hope it goes well.