Windows 98 can handle 2 tera-bytes (I think that # is correct)! But you want to know what the draw back is? Fdisk in Windows98 and SE has a limitation of 64 giga-byte which you will have to get an update for from Microsoft. It is pretty funny how it works to, cause if you put an 80 gig drive on there Fdisk will show it as a 12 gig hard drive (I thought that was a classic MS joke)! Another limitation is going to be in Windows2000. Its a Fat32 limitation where you will only be able to partition using Fat32 in 32gig Partitions .... not sure why!
Other then that you run into Filesystem limitations (ie Fat32 & Fat16).
Just installed 80G HD as slave to primary 6G HD, used Maxtor software which came with the HD, you can download software from www.maxtor.com, had no problems getting Win98 SE to recognize, partition, format and make copies of files from primary HD.