The question of whether the Linux operating system should still be distributed as a 700MB CD ISO or whether they finally need to break that threshold and move to a DVD ISO or a USB-centered image has come up again for the Ubuntu 11.10 Oneiric cycle.
There's a need in Ubuntu 11.10 to make room for Unity 2D, the Qt tool-kit (it's a dependency of Unity 2D), the possibility of multiple Python stacks (Python 2.7 and Python 3), GTK3 tool-kits, and a possible switch from Evolution to the Mozilla Thunderbird e-mail client. If GNOME Shell or any other new GNOME 3.x packages are included, this could end up inflating the image size even further.
As an alternative to switching to a DVD ISO or 1GB USB image, they could remove some "cruft" from Ubuntu as well. Among the proposals for removing were the GNOME icon theme package, man pages, parts of LibreOffice, support for old and un-used drivers, uncommon fonts, etc.
Also brought up today has been spinning language/locale-specific Ubuntu ISOs in CD size. If each ISO was limited to a language or two, the other language packs could be removed which would dramatically cut-down the size of the ISOs as they occupy a large portion of the disk. This would be similar to the Ubuntu Chinese ISO that Canonical already officially spins or what the Ubuntu France LoCo team also does unofficially. Beyond simply removing the languages not common to that region, other localizations could be made to country-specific Ubuntu ISO spins such as for local radio stations, default web-pages, etc. [While not talked about at UDS, if doing country/region-specific Ubuntu spins, it may also be possible to include patented extras for non-US non-EU spins like S3TC texture compression and floating-point textures in Mesa.] The main problems with doing many different Ubuntu spins with these localizations is the need for testing all of these different spins and the infrastructure load of having more files to distribute to their mirrors.
Rather than a DVD ISO, there's also been talk of possibly doing two Ubuntu CD ISOs. One ISO would contain all of the core components while a second CD ISO could include extras like The GIMP, Unity 2D, games, etc.
The discussion surrounding how to distribute Ubuntu 11.10 and future releases is still ongoing, but more notes can be found on this Ubuntu EtherPad page