Tom’s Hardware has an excellent article on the technology of 1.8″ iPod hard drives and their increasing capacity. Hard drives are now being produced in 100 GB sizes, which may very well find themselves in new iPods in the near future (although not too soon, as to steal thunder from the iPhone…). Other details noted include transfer rates, access times, and power consumption — all the gritty specs you’d need for building a low-power 1.8″ hard drive based device.
One very surprising fact I learned is that the tiny ZIF connectors on these new drives are rated for a mere 20 insertion (plug/unplug) cycles, which isn’t very many if you plan on moving the hardware around a lot. If you own a 1.8″-to-larger IDE adapter, you may want to consider leaving the ribbon cable connected to the adapter at all times. The article is quite a few pages long, but well worth a read.