The disk is a four layer sandwich with two outside layers of plastic with one Aluminium layer and one Alloy layer between. The alloy is a crystalline substance only a few atoms thick and it has the property of polarising light if it's crystals are aligned magnetically. The aluminium layer is below the alloy layer so laser light can be reflected back from its surface.
An intense beam of laser light is focused on the surface of the disk and it heats the Alloy layer past it's critical temperature known as it's Curie point. Above the Curie point the alloy's crystals are "loose" enough to be aligned by a magnetic field.
The magnetic head, similar to the head in a conventional magnetic disk drive aligns the alloy's crystals in one direction. the area affected by the laser beam is very much smaller than the field produced by the magnetic head so the data capacity of the system is governed by the laser technology, rather than the magnetic technology.
A weaker laser beam is used to read the data written by the more powerful laser and the magnetic field. The laser beam is reflected by the aluminium layer beneath the alloy layer.
As the beam passes through the alloy layer the aligned crystals polarise it, allowing only rays of laser light polarised in a certain ways to get through. A light sensitive sensor reads the reflected light and determines its polarisation. The polarisation of the reflected light determines weather the bits generated are "one's" are "zero's'
These devices are at present a 5.25 inch platter in a plastic case and typically provide 500Meg byte of storage.