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When you drop an optical disk into your computer, gaming console, or player of choice, the machine reads information off the surface of the disc. The density of data is limited by the wavelength of the light used to read and write the data. Currently, available technology allows us to store around 25 GB of data on a single layer, so up to 50 GB of data can go on one side of a dual layer disc; some future formats are promising even more.

A new research paper in this week's edition of Applied Optics describes a method of storing data throughout the volume of a disc, and its authors have built a demonstration system that uses a standard-size (120mm x 1.2mm) optical disc to store 1 TB of data.

Exploiting three dimensions for storage opens up a great deal more space for data. Given a 532 nm laser, then the maximum storage density on a disc surface is limited to 3.5x108 bits/cm2. If data is encoded in all three dimensions, then the data density can reach as high as 6.5x1012 bit/cm3.

Source: http://arstechnica.com/news.ars/post/20080729-optical-storage-goes-deep-1tb-stored-in-three-dimensions.html