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Fat16 has a 2 gig limit.
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FAT16 has 4GB limit under NT. FAT16 has 2GB limit under DOS/Win95 and Win98. FAT16 uses 16-bit fields to store file sizes and cluster size of 64KB under NT thus the 4GB. NTFS uses 64-bit fields and can do 16 exabytes ( 18,446,744,073,709,551,616 bytes ), how ever there are other limitations that will cut in _way_ before this.
SP4 includes an updated 'Atapi.sys' that works properly with disks larger than 8GB. I would be cautious when using Partition Magic, if it's not newer than 3.03 it will not understand the INT 13 extensions and as a result may completely screw up your 8GB or bigger drive.
Also it is possible to create larger than 4GB partition during install time if you perform an unattended installation using the ExtendOEMPartition flag like so:
[Unattended]
FileSystem = convertNTFS
ExtendOemPartition = 1, NoWait
You must have SP1 or greater for this to work. If you are unable to create larger than 4GB drivers, it doesn't meen that NTFS doesn't do it.
//fats