Iomega's new 750 megabyte Zip drive has me thinking about the future of portable storage. After all, this is the company that perfected high-capacity removable disks. Its first Zip drive, released in 1995, let you carry 100 MB of data -- PowerPoint files, say, or image-intensive documents -- in your pocket on what was, essentially, a fat floppy disk.

Zip disks proved to be rugged and easy to use. They were also wildly popular: Witness the 48 million drives and 300 million Zip disks shipped so far. Existing Zip users will find the new 750 MB capacity simplifies data backups. And the latest version is faster than ever.

In fact, a PC with a USB 2.0 interface can get blazing transfer rates that Iomega estimates at 7.5 MB per second. The drive also works with the USB 1.1 port found on many older computers, but at far slower speeds. And although it can read earlier Zip formats, the new drive can only write to 250 MB disks, not the 100 MB variety.

Now, a removable 750 MB disk is a handy thing to have. But the question facing Iomega is whether new users will choose it when the cost of CD-RW drives has dropped well below the $179 asking price for the 750 MB Zip. And media costs aren't comparable: A 750 MB Zip disk costs $12.50 if bought in quantity; you can buy three or four 650 MB CD-R disks for a dollar depending on where you shop.

We're at an interesting time for computer storage, much like that period in the mid-'90s when the first Zip drive became a success. As then, we're seeing an explosion of new media that demand large storage capacity. But today we're talking about MPEG-4 video, digital photographs and music, all of which test the limits of both Zip and CD-RW.

Ironically, the future of portable storage might be in the form of an even older technology, the venerable hard disk. Look at what's happening with digital video recorders (DVRs) such as those offered by TiVo. Rather than recording a favorite TV show onto a VCR tape, a DVR records to a hard drive. The difference in picture quality is marked: Recording to tape gives you a degraded image, but digital recording to a hard drive exactly duplicates the original.

So maybe we're looking at portable storage devices based on hard disks that carry not just 750 MB of data, but tens or even hundreds of gigabytes. We recently examined Apple's iPod, which uses an internal disk up to 20 gigabytes in capacity. Imagine future consumer products with a built-in drive bay so you could slide portable disks with movies, photos or songs straight into the chassis. Such drives would make Zip disks and CD-RW drives look obsolete.

Why, given the fact that hard drives still have reliability problems, do I suggest they pair well with consumer electronics? The short answer is that the drives are getting better, able to survive bumps and falls. The key will be to extend hard drive lifespans in products that are meant to be used for years in household settings.

The longer answer is that hard-disk manufacturers have no choice but to explore this market. As drives get bigger, profit margins are collapsing, which is why Fujitsu has gotten out of the desktop drive market altogether. Watch remaining players such as Seagate and Maxtor position themselves for use in TV set-top boxes and digital stereos.

An interesting article on CNET speculates that portable hard drives might eventually replace VHS tape. Writers Michael Kanellos and Richard Shim point to Toda Citron, a company that is developing the so-called HardTape, a hard drive designed for use with TVs. Portable hard drives might be just what's needed to revive a storage industry desperate for new ways to turn a profit.