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[Heimdall]

If your xbox is softmodded (it sounds as though it is) then the disk needs to be a lockable IDE (PATA) disk - and they seem to top out at 750GB. If you need a larger drive you could take a chance with a lockable SATA drive and a SATA to IDE adapter, but the results are variable, and only seem to work even vaguely well with chipped / flashed Xboxes - have a look here. If your library is that big you might be better off looking at a NAS and streaming the files from the NAS.

There are a few ways to upgrade the hard drive on a softmodded Xbox - have a look at this post.

[leezaal]

As far as upgrading the xbox hd is concerned how you go about it is pretty much dictated by whether your pc and xbox will allow the various methods.
In my case upgrading to a 40 gig western digital hd via my pc didn't work as my motherboard/bios would not let me unlock/lock the drive.
What did work on my soft modded xbox running evolution x was a program called chimp 2.4
It took ages about 3 hours and is a bit dodgy as chimp is a hd clone utility and the second hd had to be powered by my pc, so live wires running every where!!
But it did work perfectly first time so it is the method i would suggest looking into for a softmod hd upgrade.

hope this helps