This report from MIT's Technology Review:
Over the past decade, flash memory has changed the electronics landscape, giving us robust storage in tiny devices such as iPods and cell phones. As chip sizes shrink, however, engineers know there will be limits to flash performance, and they have been eyeing a replacement technology called phase-change memory. Today, Intel announced a research advance that doubles the storage capacity of a single phase-change memory cell. This new approach is also implemented in the chip via algorithms so that it won't add cost to the existing phase-change memory fabrication process.
The traditional method of storing information in solid-state memory, such as flash and ram, used electrons. This was replaced by phase-change memory which uses the material's own arrangement of atoms or physical state to store data. Previously, only the amorphous and crystalline states could be used to store the I's and 0's of digital data.
Intel partnered with ST Microelectronics to come up with a material called GST. It's a type of glass that has physical states that are responsive to heat. With this, they are able to control 4 physical states, thereby doubling the amount of memory that can be stored.