I have a 200 GB Samsung SATA and a 500 GB Seagate SATA. I also have three
external drives a LaCie 160 GB and a 60 GB IDE Maxtor and 160 GB IDE Western
Digital in cases that I bought separately. All work fine with any version of
Linux that I have tried, including Jaunty (9.04).

I know many people who have TB drives. Remember than Linux works on servers that
run some of the biggest companies, including Google, eBay, Amazon, Wikipedia,
etc. They all handle vast amounts of data.

BTW, Jaunty supports etx4 which is way faster than ext3 and it handles much
larger files (up to 16 TBs) with ease. It can handle a volume up to 1 exabyte (1
million terabytes). Transfer is smoking fast. :)