The current kernel used in the TiVo software does not support LBA48. This limits the max addressable space to 137GB per drive.
You can of course patch the kernel, but the next time TiVo push out a software up date you'll have to run around and re-patch - unless of course you turn off the updating. How much hacking do you want to do?

You can of course put two drives in there, which should give you plenty of space.

I'll be hacking my Series 2 DirecTV TiVo next week to add a 120 gig Seagate drive (chosen because it has a 5 year warranty) and enable the USB ports so that I can redirect the dial home calls out over the internet and drop the home phone line.