With FFS (the filesystem supplied with AmigaOS 3.0/3.1) you can only use the first 4 GB of the harddisk (you can use bigger drives, but don't touch anything beyond the first 4GB, otherwise you're doomed).
With a replacement filesystem (like the excellent SFS, which is Freeware), you can use up to 8GB - this limitation is caused be the crappy IDE driver supplied with AmigaOS 3.0/3.1.
With a better IDE driver, you can use drives of any size. Such an improved IDE driver is included with AmigaOS 3.5+. I *think* (I'm not 100% sure) that IDEFix (Aminet) also contains an IDE driver that can handle more than 8GB.