I've heard before, maybe in the wrong context, that no matter how much you patch OS3.1 you will always have issues with large gb hard-drives. Is this true?
Not if you use IdeFix (Aminet) or a proper patch. Setup the first four GB as if it's the entire HD. The rest of the drive can be setup in any way you want (this prevents problems when you deactivate the patch for whatever reason). In other words: Don't let a partition cross over from the first four GB into the rest of the HD.
Also, make sure to get rid of Fast File System, and use PFS or SFS instead. Those file systems are much better than FFS, and don't have that annoying 2 GB partition size limit.