CNET News today reported that Toshiba has just announced a 100 GB 1.8" hard drive. This is the same profile drive used in hard-drive based iPods, and Toshiba is Apple's supplier.

Considering that the last size bump was just two months ago, when Apple updated its line to include an 80 GB iPod, it seems that a quick implementation is unlikely. (The drives won't even start shipping until January.) In fact, Apple has not acknowledged that a 100 GB iPod is on the way at all, but there's no reason not to implement it, and naturally we can expect capacities to increase indefinitely.