Windows XP HD Capacity

I'm thinking of buying a 700 GB hard drive, but I know that just plugging it in and having 700 GBs is too good to be true. What kind of configurations and headaches am I in for?

Windows xp cant index past 137gb; assuming ntfs. Which means it will just act like it's that size(last time I checked). So you can...

1.Make a bunch of partitions(although you can have only four)
or
2.Read this
http://support.microsoft.com/kb/303013
You can break the 137gb limit although it doesn't say anything about a maximum size and your motherboard has to support it.

I think ext3(linux) file systems can handle 2tb, but you have to take the plunge and go all out linux since windows xp has no read or  write support for ext3