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SvennoJ on 30 March 2011
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A highly placed development source has confirmed to Digital Foundry that the new disc format being beta tested in a new dashboard upgrade adds 1GB to the storage of Xbox 360 game discs.

The maximum space allocated to game data on the current disc format is just 6.8GB out of a maximum of 7.95GB on a standard dual layer DVD, with over 1GB dedicated to a DVD-Video partition that also contained anti-piracy security sectors. Astonishingly, this meant that the last generation PlayStation 2 had a higher level of raw storage available to games developers than the newer Xbox 360. It seems that this video partition has either been drastically reduced or omitted completely in the new format Microsoft is looking to roll-out.

http://www.eurogamer.net/articles/digitalfoundry-1gb-360-disc-upgrade