For many years the storage at the atomic level has been seen as the Holy Grail, promising a huge increase in possible data density. The Kavli Institute of Nanoscience at Delft University of Technology in the Netherlands have published research giving the first practical demonstration capable of storing 1KB of data.
The technique uses an array of chlorine atoms arranged on a copper substrate, upon which individual atoms can be moved in a fashion similar to a sliding puzzle, where each atom can be in one of two positions. Thus far a 99% accuracy has been demonstrated, far exceeding all previous attempts at creating a similar type of storage device.
Before we get carried away about the possibility of storing 500 terabits of data per square inch, there are many issues which need to be overcome before any commercial devices can even be contemplated. One of the biggest hurdles to overcome being the need for a clean vacuum environment maintained at 77K, the temperature of liquid nitrogen.
The current access speed is also extremely slow, which needs to be significantly increased along with a higher level of data accuracy before the technology can will be viable. It is these main issues which will determine if the current headlines making such claims as being able to store all books ever written on a drive the size of a postage stamp. Such technology if the issues can be overcome and were made commercially viable would have a significant and lasting impact on the data storage.