That doesn't sound right, have you used disk management within XP or Vista ? To get to there, right click on my computer and select manage, then disk management.
I've added this to one a watched thread and hopeully we can sort this out.
EDIT: I would like to add that a laptop and a PC can access 400gb external drives (and now a 500gb) and also, Windows XP 32bit can handle a 400gb quite happily.