Minidiscs don't actually hold more information than a CD.
There's two versions; Minidisc and Hi-MD.
Regular MD holds around ~250 megabytes, compared to CD's ~650 megabytes; and uses a 780nm (cd-style) laser and a magneto-optical head to enable recording. The way it gets more music onto the disc than CD is because it uses compression, similar to MP3 (ATRAC and ATRAC-3.) There are a few different compression settings the more modern ones can do, standard ATRAC v4 or v5 (~60-80 minutes per standard disc) or ATRAC-3 v1.0 or v2.0 (often called MD-LP) that can hold ~240 minutes per disc.
But because it's using compression, the actual data written to the disc is less, compared to CD's raw PCM.
The laser frequency and pit pitch on a standard minidisc is the same as that of CD; simply with reduced storage and compressed audio vs raw uncompressed linear PCM.
Hi-MD uses the same codecs (ATRAC/ATRAC-3) but uses a 650nm laser and DVD's pit-pitch to give approximately 1GB storage per disc, vs 250mb. Some Hi-MD recorders will allow you to record raw uncompressed PCM, like CD; giving you ~100 minutes of CD quality audio on a small disc.
So, think of it this way:
CD/PCM/780nm/650mb::MD/ATRAC/780nm/250mb
DVD/(lots of codecs)/650nm/4.7gb::HiMD/ATRAC or PCM/650mb/1.0gb.
Both use magneto optical recording; where the laser, similar to a CD burner, heats up a spot on the disc; but instead of the laser actually writing to the disc, a magnetic field is switched to change the polarity of the crystal structure. (versus something like CD-RW or DVD-RW which uses different temperature points for phase change and write.) So basically to be written to, the heat *and* magnetic field both have to be there. That means they're rather durable; as to erase such a disc, both the optical heating and magnetic field have to be present.
To read, however, all you need is the laser. MO discs (such as Minidisc) can hold archival data a lot longer than standard writeable/WORM or rewriteable optical discs. (This is less true with BD-R/BD-RE blu ray discs as they use inorganic dyes, vs CD-R and DVD-R's organic dyes; but MO still outlives them.)
It was actually a really cool technology but was too expensive too late.
