Older powerbooks do not really utilize any more than the 120GB size. I have dozens of G3 pismos, lombards, iBooks, and Titanium G4 models, and my 160GB PATA drive is seen only as 128GB, whereas the 120GB model shows as 118GB. For old machines, the 5,400 RPM PATA hard drives in the 80 to 100 GB seem to offer the most bang for the buck. In most cases, using a 5,400 vs. 4,200 drive, makes significant speed improvements.
I use external IEEE 1394 external hard drives to store large files efficiently...some are huge (ITB RAID units), but still work very well. They are also seen roughly as the size they are. For overall storage efficiency, you cannot beat the firewire interface. It is entirely processor independent...unlike USB 2...and therefore even the original 400MB model, makes USB look bad. Firewire gives an honest transfer rate, well above the hyped USB 2 format, despite published theoretical USB 2 advantages (supposedly 480MPs vs 400MPs)...advantages that exist on paper only.
The lombards/pismos have expansion bay PATA ability, which often proves quite handy. Again though, there is a limit well below the amount of information allowed on the firewire drive.
There are PATA/SATA converters out there, but have not used the ones I have...as of yet. The results may prove different, but I rather suspect there is a built in limit for the older powerbooks, and by converting to the PATA from SATA...you are again in the same kettle of fish...back to PATA limitataions.
If it was simply the PATA interface that was the entire problem though, then PATA hard drives on desktops would experience similar limitations. Such is definitely not the case.