A density of up to 138 Gb/inch² according to Tohoku University in Japan is what you're looking at right now. Perpendicular magnetic recording technology promises better peformance and reliability, but what really won me over was Hitachi's presentation. Oh, the pretty colours.
At $270, Hitachi's 5K160 (160GB in a 2.5" drive) isn't quite budget material yet, but then again nothing is when it's fresh out of the oven so we'll just have to wait. PMR's worth looking into, though – there's a handy Perpendicular 101 on TG Daily for your convenience.