Summary form only given. High-capacity, terrestrial optical transmission systems are now being widely deployed offering aggregate capacities >1 Tb/s over distances of >1,000 km. They use dense wavelength-division multiplexing (DWDM) techniques in combination with high-speed electrical time-division multiplexing (ETDM) to minimize the cost per bit and kilometre whilst maintaining flexibility and scalability at the same time. This paper reviews the current state-of-the-art of high-capacity, terrestrial DWDM/ETDM systems in research and development. It explains design rules and limitations fundamental to these systems and discusses challenges and enabling technologies for next-generation optical networks employing transparent photonic switching.