The capacity meter defaults to 2048 on reset (think removing battery for a long time). 2048 to 1700 is one learning cycle of max 1/6th step change. From 1700 a 1/6th change downwards would be 1400.

So, for "normal" capacity battery you'll need 3-5 learning cycles.

One of my original Nokia BL-5J batteries is now at 1000-1100 mAh capacity. It had a tough life though, sat a few months in my switched off spare N900, and slowly drained to empty (2.5...2.8V or something)..