It depends on how you view it, if you say its the size of the taken picture then yes its 1.23megapixel, however the sensor itself has more pixels and this is the normally quoted value. There are special name for each and for the life of me i can not remember them, if i do i'll add them here, but its like a hard drive, you buy a 200gig drive, but do you get 200gig of space?? No, its its unformatted capacity, add the formatting of the drive and you loose a % of space. Same is with a camera CCD, you dont get all the effective pixels, just most of them.
PS, with the modified camera program you do get 1.3megapixel pictures, however that is a software trick i think, i dont know how he did it, but those pics are 1.3 anyway.