The IBM RAMAC 305 (the world's first hard drive) was officially announced today (September 13, 1956). In 1952, in San Jose IBM opened a research lab managed by Rey Johnson, and one of its first assignments was to create a magnetic storage system that could hold 5MB of data.
Johnson's group coated platters with magnetic material and stacked them on top of each other. Data was fetched by a head that traveled up and down the stack of rotating platters.
Note: There is no sound in this video.
For comparison reasons, here is a more modern hard drive in action. In all ways the current generation of hard drives are far superior to the first generation (they're smaller, better, cheaper, faster, and have a greater capacity).
Hopefully in the not too distant future all these drives will be replaced by ones that use flash RAM (or something better). Its already in the process of happening, some first generation solid state drives are already shipping, but they're expensive (roughly about $30 a gigabyte).
For example, earlier this year Samsung started selling a 32GB NAND flash hard drive. The drive is about half the weight of a conventional hard drive, has reduced power consumption (uses about 5% of the power of a mechanical drive), and has no moving parts. It can read data three times faster and write data 1.5 times faster than mechanical drives.