I confirm these are kilo bits per second
The setting is however a MAXIMUM bandwidth. SL will hardly ever use more than 2Mbps, and this only just after logging in or teleporting. The v220.127.116.11 viewer will also use more bandwidth than v1.2x (which got new, more efficient messages to communicate with the sim server.
Also, the actual used bandwidth will depend on may things, such as the bandwidth available for the sim server itself, the number of avatars in the sim, etc.
Finally, the packets lost is not directly correlated to the bandwidth in use, but rather to the network load on the path between the sim server and your computer. SL uses UDP packets, which are not repeated when lost between two routers, unlike TCP packets. That's why there is a packet loss at all.