From Sega Retro
The GD-ROM (Gigabyte Disc Read Only Memory) is the optical media used by the Sega Dreamcast (as opposed to a standard compact disc) and Chihiro arcade system. GD-ROMs have the capability of holding a maximum of 1 GB of data, rather than the standard 650-700 MB of a CD.
Developed by Yamaha, the GD-ROM is a proprietary format which works by packing the pits on the disc closer together to store more data. Along with more storage, the GD-ROMs provide an extra level of copy protection as they cannot be reproduced using a standard CD-Writer.
Sega's decision to use the GD-ROM format in the Sega Dreamcast is cited as one of the main disadvantages of the console when compared to the PlayStation 2. The PS2 uses DVD-ROMs, capable of housing 4.7GB (though this can be increased to 8.5-8.7GB if the double-layer format is used, and early PS2 games used the basic CD-ROM format) which allows for bigger games. Furthermore this made the console compatible with DVD movies, making it an inexpensive DVD player too. The success of the DVD-ROM format has largely rendered the GD-ROM format inferior and it is no longer widely used.
Regions of a GD-ROM Disc
The are 3 distinct regions when you look at the data (reflective) side of a GD-ROM disc.
A normal CD-reader will only read the first inner track and will not read past the black area because according to the TOC read by the normal CD-reader there is no data there. With a modified firmware that looks for a second TOC in the high-density region it is possible to read data from the high-density region even on a normal CD-reader. One can also utilize a "swap-trick" by first letting the CD-reader read the TOC off a normal CD with a large track and then swap that disc with a GDROM in a way that avoids alerting the CD-reader that a new disc with a new TOC has been inserted. It is then be possible to read as much data from the high-density region as the TOC from the first disc indicates.
The details of the high-density region aren't really known, but most likely the pits are just packed tighter than normal but still within tolerance since there is no problem to get a standard CDROM to read data. Claims that SEGA dispensed with error correction as a way to increase the payload are not true. GDROMs use the same error correction as standard CDs but since data is packed tighter, scratches will affect more data and thus be more detrimental.