Usually, in PC-land, if you have an ATA-66 (non-SATA, EIDE or "parallel" ATA) controller you shouldn't expect to be able to "see" greater than 128GB of a drive, even if the drive is much larger, say a 500GB drive.
However, an ancient Apple tech note seems to indicate that you need only make sure that each *volume* on a > 128GB is below a certain size, and then you will be able to see and use the whole disk; it will just be sliced into multiple volumes.
I have a TiBook that loaded the "Macos9Lives" image just fine and I am now wondering if I should replace the old, slow hard drive with either an SSD or a spinning drive with greater capacity. Probably I can get by with 128GB but if I can have more space for photos without having a drive hanging off it, that would be awesome...