Exactly what Thomas said. Once you've made your emergency floppy put that in the disk drive and your OS 3.9 CD in the CD drive and boot. It'll boot into Workbench and you'll be able to format your hard drive and install the OS. I actually just did this on one of my systems a couple weeks ago and was very surprised how straight-forward it was (for an Amiga, that is).
Even though I know 3.9 can support larger partitions I still try to keep mine around 2GB each, and test them thoroughly before putting any irreplaceable data on them. You should be fine though.
I'm sure PFS or SFS is a good idea, maybe one of these days I'll get around to trying them out too, LOL.
