In Phase II we propose a revolutionary surface- emitting /receiving optical head. Building on our successful Phase I results, we will develop transceiver array optical heads comprising one- and two- dimensional arrays of thousands of high-speed, densely-packed addressable vertical cavity surface- emitting lasers and photoreceivers integrated to microlenses. This new critical technology promises to displace conventional optical heads containing single edge-emitting lasers which are currently used in compact disc players, laser print engines and local area network fiber optic communications. Future credit card-size optical memory technology comprising our transceiver array optical heads may well be the next dominant trend in digital storage. The biggest fallout of this new critical technology may be its replacement of CD, cassette tape, digital audio and video tape and laser discs. The new technology also promises to be the digital laser printhead of the future for high-speed, high- resolution computer-to-plate sheet-fed presses and for electrographic and photographic digital laser printing & copying. In addition, this critical technology will impact numerous parallel optical processing applications including: free-space optical interconnects, digital optical computing, neural optical computing and pattern recognition through, e.g. dramatic simplification of the interconnection optics.