InPhase has announced that they've successfully demonstrated the highest data density of any commercial technology by recording 515 gigabits of data per square inch. Here's part of their press release:
InPhase Technologies, the world's leader in holographic data storage, announced today that it has demonstrated the highest data density of any commercial technology by recording 515 gigabits of data per square inch. Holographic storage is a revolutionary departure from all existing recording methods because it takes advantage of volumetric efficiencies rather than only recording on the surface of the material. InPhase will deliver the industry's first holographic drive and media later this year. The first generation drive has a capacity of 300 gigabytes on a single disk with a 20 megabyte per second transfer rate. The first product will be followed by a family ranging from 800GB to 1.6 terabyte (TB) capacity.

"IT professionals are experiencing enormous growth in their data archives," said Wolfgang Schlichting, Research Director, Removable Storage, IDC. "InPhase Technologies' announcement is an important milestone in storage density, demonstrating impressive capacity increases enabled by holographic storage. The technology represents a potential alternative to incumbent technologies for archival storage requirements," he added.

Densities in holography are achieved by different factors than magnetic storage. Density depends on the number of pixels/bits in a page of data; the number of pages that are stored in a particular volumetric location; the dynamic range of the recording material; the thickness of the material, and the wavelength of the recording laser.
With developments like this, it probably won't be long before we see those 1.6 TB discs. If you'd like to read more, InPhase's entire press release can be found here.