You didn't misunderstand my post at all :-)
I did a complete reinstall when I got the 20Gb hd, but no matter how much I fiddled with it and told it what it was it wouldn't recognise anything above 8Gb after a reset.
I remember something about the 4-way buffer (which I have, so I always press yes) and I vaguely remember something about the "support for larger disks" and I'm pretty sure I pressed yes for that too.
It works fine under OS3.9, so I won't bother doing a reinstall of 3.5 to find out, unless I really have to ;-)
Cheers for pointing that out though :-)
EDIT: @Karlos
It only happened under OS3.5, it's fine under OS3.9 so I'm not worried about it. As long as I can get the stuff below the 8Gb limit OS3.5 has here for emergency purposes I'm happy :-)