Up until now, it was looking like Blu-ray's 25GB per layer was going to be the limit optical discs could store per layer without resorting to holographic storage.  Now sony has managed to go much further by using magneto-optical hybrid recording to squeeze one terabit of data per square inch, 5 times the density of even today's highest capacity hard disks.  Magneto-optical discs were common in the early days of optical discs, particularly with Sony's MiniDisc storage medium. 

For a typical 12cm size disc with 14 square inches of recording area, this new technology would give a potential capacity of 1.75TB per disc.  According to the Inquirer source, the disc is written much like a traditional magneto-optical disc, but with the laser light focused to a much smaller point.  However, at this time, there is little other information available other than that Sony plans using this technology for its next generation hard disk.