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This new design improves the signal/noise ratio and is said to enable increased bit density and higher drive performance than other available drives.
Increasing linear density by advanced encoding, allowing increased bit density without increasing the magnetic recorded density on the tape
A smaller aperture lens than the one currently used can produce a spot on the disk that will enable "higher capacities by achieving higher track density and higher bit density, while using low cost laser diodes that are in volume today," according to a company white paper.
Additionally, with planned improvements in track spacing and bit density along a track, the LTO format will allow future drives to offer capacities up to 800GB.
This increase is driven partly by increased linear bit density on the disk and partly by increases in rotational speed.