This item is from the Yet Another Enhanced IDE/Fast-ATA/ATA-2 FAQ, by John Wehman and Peter den Haan with numerous contributions by others. (v1.92).
When it became clear that improvements in harddrive technology and the increasing demands made by software would eventually strain the capacity of the ATA interface, the drive industry, in the form of the Small Form Factor (SFF) Committee, created a compatible extension of ATA called ATA-2. This standard not only adds faster PIO modes and DMA modes, but also improves upon Plug'n'Play and compatibility with future revisions of the standard.
While there is also a new way of addressing sectors on the harddisk (LBA), this is merely a simplification. Contrary to common myth LBA proper has nothing to do with breaking the famous 504MB (528 million bytes) barrier. In fact, even in the old ATA/IDE standard the capacity limit is well over 100GB.