I run a 2 tb on mine. I also formated on my xbox for the 16 GB of xbox space. The rest of the space is left in Fat32. Anything you put on it while on the regular dashboard will be placed on the xbox formated 16GB. Anything you put on it while on Freestyle or XeX will be placed on the rest of the space.
That's the end result I'm hoping for. I purchased the XECUTER X360USB PRO, XECUTER CK3i, and XECUTER PROBE V3 bundle from ModChipCentral. Should be here tomorrow. My ultimate goal is to be able to run emulators (mostly 8 bit NES) and copy my retail purchased game DVD's to the hard drive so I don't have to keep using the media. Faster loading from hard drive and no chance of media becoming damaged or lost.
One thing I've observed (after reading these forums for months), is that FAT32 is what everyone is using (I assume by necessity), but when I make an ISO of my game discs (GTA V for example) it results in an 8GB file. I may be an XBOX 360 newb, but I've been a computer user for 30+ years (all the way back to the C64) and I know that FAT32 will only store up to 4GB files. How am I going to store my GTA V discs on my hard drive and have them load from whatever custom desktop I choose?
I hope I chose the correct tools to allow me to do what I desire. Even after reading the forums for months, there doesn't seem to be a very clear answer as to what pieces are needed to achieve what goal.