The capacity of a removable storage disk has increased rapidly the last two decades. The old 5¼ floppy disks store 360 KB (1.2 MB if high density) of data. The later 3½ floppies store about 1.44 MB. The optical media such as CDs have a maximum capacity of 650 MB (74 minutes audio) to 800 MB (90 minutes audio). Most modern DVDs have a capacity of 4.7 GB. In 2003, Philips announced a dual-layer DVD with a capacity of 8.5 GB. And earlier this month, TDK announced a new 100 GB Blu-ray Disk Prototype.

Soon to be obsolete (Courtesy: Bit-Tech)To top it all, now Toshiba has patented (US No. 6879556) a disk that could store 40 to 100 times more information that a conventional DVD, using more nanometre-scale sloped ridges to diffract light:). The technology, dubbed Articulated Optical Digital Versatile Disk (AO-DVD) could theoretically hold 800 GB :D:D.
Conventional DVDs store information in the form of ridges and depressions, each several hundred nanometres wide. These correspond to bits of binary data - '1's or '0's. The data is read from a disk by bouncing laser light off its surface and measuring the angle at which it reflects.
However, in Iomega's AO-DVD, sub-wavelength surface bumps would slope at slightly different angles - this could be used to encode up to 100 times more information!! Iomega claims the technique could improve data transfer rates by a factor of 30 as well.
Several other groups are also working on increasing the size of an optical disk. For example, a similar technology is being developed at Imperial College London, UK, which uses the polarity of reflected light, instead of its diffraction, to detect sub-wavelength slope features.
It remains to be seen which technique would finally offer the superior advantages to come out at the top. And by the way, a 1.5 TeraByte optical disk is in the pipeline, possibly to enter the market by the year 2010 :):).