As linear density increases, the readback waveform becomes significantly different from that constructed from linear superposition of the isolated transition response. This discrepancy arises as nearby transitions interact with each other at high linear densities. Nonlinearities cause significant reduction in the available signal energy as well as distortion in the signal waveform. The loss in signal energy in turn limits the capability of any signal detection scheme. In this paper, we investigate nonlinearities in thin-film media using simulated transitions created from micromagnetic computer modeling, and study the impact of such media nonlinearities on the performance of two competing modulation codes: the rate 8/9 (0,k) code and the rate 2/3 (1,7) code.