Bar none, this is the best article I have read on the topic:
In a nutshell, to answer your questions:
- What's the big deal with 4K sectors?
The primary advantage is more efficient use of the raw storage space. The necessary ECC calculations were starting to provide diminishing returns using 512 byte sectors, but they can be done much more efficiently on larger sector sizes.
- Is it marketing hype, or a real advantage?
The real advantage is that drives larger than 2TB will be more affordable and reliable sooner than without the transition. The same idea holds for smaller drives too, but the returns aren't as dramatic. There are some theoretical advantages to having the sector size map to the common allocation size in a volume (4K for NTFS is about as common as dirt) and memory pages are generally 4K in size as well (makes the pagefile/swap happy).
- Why should somebody building a new PC care, or not, about 4K sectors?
Today - the only thing you should care about it is probably not getting one. There are still a few kinks that are being worked out that if you aren't aware of might cause you grief. Windows XP support is one, the drives lying about their geometry is another.
- Why is this transition taking place now? Why didn't it happen sooner?
It has been in transition for many years already, but consumer drives are just starting to appear on the market.
- Are there things to look out for when buying a 4K sector hard drive? e.g. incompatibility?
You probably won't experience a problem with Windows 7 or Vista, but any of the older Microsoft OS's might cause you grief. There is compatibility built in, but because of sector alignment issues it might cause performance degradation.
- Anything else we should know about 4K sectors?
Read the article, brush up on your math, and then read it again. Really it is a good thing and will enable the storage industry to continue forward more rapidly.