in jtag a fat32 hdd can be up to 2To (3To won't work. just like in winxp-7 32bit [max 2.19 because of mbr limit]) of xbox360 and xbla games. but no profiles, saves or DLCs.
but if you hook up the drive through the official Hdd plug instead of usb you can format it (x360' fatx) and get a native 2To drive that will then support saves and profiles and DLCs.
I currently use an internal 120go for saves, profiles and DLCs and a 2To usb drive for everything else ;p