For decades, the 512byte physical disk sector size has been adopted as the industry standard. Until recently, hard disk manufacturers have started their gradual migration to a new standard - 4K bytes physical sector size (also known as the Advanced Format Technology).
One example is the Seagate Barracuda series, which is already widely available in market:
However, many software vendors including Microsoft are relatively slow in response to the new standard. To ensure compatibility, 512-byte sector emulation is necessary. Seagate SmartAlign Technology presents to software like Windows to see a 4K sector hard disk as if it is the old 512-byte sector hard disk. Small overhead is needed in read write, handled by the hard disk's on board disk controller.
Microsoft Knowledge base article 982018 addressed certain compatibility issues, which are caused by the 512-byte sector assumption. (http://support.microsoft.com/kb/982018/en-hk) It sheds lights on some possible problems as for a long time, programmers have made the assumption that the physical sector size is 512 bytes, which is no longer valid.
Windows 7 / 2008 R2 starting from SP1 supports the advanced format with 512-byte emulation. However, native 4K sector size is not supported yet.
Intel Rapid Storage Technology also requires driver updates in order to use the new 4K sector technology:
According to Intel's website, it states, "If you try to install the operating system on a 4k sector disk with a driver
older than Intel® RST version 9.6, the install process might not complete."
There are practical reasons for disk manufacturers to migrate their technology to 4K sector. Without the move, the yearly capacity growth will stop. There're also other advantages, like more efficient use of space with less overhead and better error correction check (ECC). However, during the transition period, the concerns of compatibility and performance issues exist, which I think every network administrator should pay attention to.