Everything TCP/IP or UDP uses packets. Its just the way Windows describes it to you that makes it confusing.
Windows quantitates LAN connections (which is what the connection is between your computer and the cable modem is) using packets, so your broadband connection shows "packets". Windows quantitates dial up connections using the number of bytes transmitted/received.
A packet would be made of up a numbr of bytes to carry information including source, destination, and the actual data, amongst other things. Thats about it.