Don’t go out and buy the latest largest hard drive to store your piles of data.
Do get the most value out of your existing drives by adding them to a RAID array.
You can join an array of drives of any sizes to create a huge volume. You can even install Windows on a RAID volume if you have proper motherboard drivers. I recommend using one hard drive for your operating system and adding an array for data storage.
Things to look out for: a striped array will net you the most space (every drive’s full capacity is used) but if one of the drives fails you lose the whole volume. If you go with RAID5 you get parity and redundancy. If one drive fails you can swap in another one of the same size and recover all of your data. The downside to RAID5 is that one entire drive will be used for parity.
Check out these RAID controllers if your motherboard doesn’t natively support RAID5.
Also, you can trick Windows XP into supporting RAID5 the way Windows Server does: http://www.tomshardware.com/2004/11/19/using_windowsxp_to_make_raid_5_happen/