Apple's Fusion Drive combines 120GB of solid-state storage and a regular platter-based hard drive of either 1TB or 3TB. Apple says the operating system and software will be installed on the flash memory part while all other data, such as media and documents, stays on the hard-drive part. However, users can move apps and files between the two sides of the drive to improve performance.
Apple claims that the Fusion Drive will offer performance very close to that of a solid-state drive and much faster than a regular hard drive.
Hybrid drives have been available for a long time. Generally a hybrid drive, such as the Seagate Momentus XT, combines solid-state (or flash) storage and regular platter-based storage in one drive. As described above, the flash memory part is used to store frequently accessed data, such as the operating system and system files, while the hard-drive part is used to store documents and other more static data. This allows the drive to give better performance while still offering a large amount of storage space at a lower cost.
The Fusion Drive is one of the first hybrid drives, if not the first, on the market to offer 128GB of solid-state memory; others generally come with 64GB or less. Most existing hybrid drives are sized for laptops, with a 2.5-inch design.
While the details of the new Fusion Drive are still sketchy, judging from the way the drive was introduced and its capacity, if it's an actual physical drive and not a solution made by combining a standard solid-state drive and a hard drive, it'll likely come in the 3.5-inch size of a desktop hard drive. This is because only 3.5-inch hard drives currently offer capacity larger than 1.5TB.
It wouldn't be surprising, either, if the drive came in a proprietary design, or even with a connector, that will work only with Apple computers.