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So does the SSD portion effectively become a cache for the traditional platter HDD portion? Seems similar to an L1 cache for a HDD. Of course, as the article states, the caching algorithm will be application-specific. At 4GB however, it wouldn't be hard at all to keep a significant portion of the OS and any oft-used apps like browsers directly in the SSD portion.

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That's the idea, but 4GB for a 500GB disk seems extremely small, especially considering the price. The other problem I see with this is that the 4GB are probably only one flash chip. Fast SSDs manage to sustain high transfer rates by effectively arranging flash chips in a RAID-0; the 80/160GB Intel X25-M SSDs use 10 chips in parallel if I remember correctly.

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