Storage capacity on laptops, PCs, DVD recorders, flash memory cards, USB drives and portable multimedia players has grown exponentially this past year while prices have taken a dive.

Research company Gartner, says 88.2 million USB flash drives were shipped in 2005, and 115.7 million will be shipped in 2006. In the wake of unprecedented demand, flash memory cards and drives under 256Mb have virtually become redundant as affordable 1Gb and 2Gb units and new 4Gb and 8Gb products hit the market.

Prices for SD memory cards in particular, vary wildly. Previously high-end 256Mb SD cards sell for as little as $15 and 512Mb versions can be found for $20. While some outlets still charge over $100 for 1Gb cards they’ve plummeted to below $40 in other locations, and 2Gb cards can be acquired for well under $100, when they were triple that just a year ago.

MiniSD, CompactFlash and Sony’s MemoryStick formats still sell for a premium but are also trending down. Meanwhile new 4Gb SDHC (high capacity) and 8Gb Compact Flash cards are making an appearance. While not compatible with the older SD readers, SanDisk 4Gb cards (around $259) ship with a card reader to get around that. Next generation digital video recorders and still cameras will increasingly rely on these higher capacity disks.

While the market is being flooded with tiny memory devices, MP3 players and portable hard disks, there’s evidence of a growing failure rate among lesser known brands. According to a report by Australian firm Payam Data Recovery, there’s been a 300 percent increase in USB drives failing through faults, misuse and poor manufacturing.

The company says the pressure is on for manufacturers to compete on price, forcing some to use inferior flash memory. It expects the problem will only worsen, and urges buyers to stick to well known brand names such as SanDisk and Kingston Technology.

While it’s believed portable flash drives will handle an average of 100,000 read-write cycles, some experts are suggesting even the best drives may be subject to slowing performance and shorter life due to fragmentation, particularly as disk size grows.

Users should consider using PC tools to de-fragment portable disks and clean up the bits of old files that inevitably get left behind through constant writing and rewriting.

Until recently standard PC and laptop configurations remained around 40 – 60Gb, now even laptops sport 120Gb hard drives and high end PCs, particularly those geared as multimedia stations, are pushing out to 350Gb. In the case of high-end Hewlett Packard machines there’s dedicated space for an additional 300Gb drive.

As the rich media revolution gains ground, so will the frustration of having to offloading songs or video files from your computer to make room for the latest content. If you’re serious, an external 400Gb hard drive attached to your broadband router, PC or laptop costs $400 – $500 or a terabyte capacity portable disk might be perfect for the media hungry at $1000 –$1500.