The easiest and best solution is to use or update to Windows XP (or 2000), which does not have the partition size restrictions of the now obsolete Windows NT, with the exception that you still need the BIOS Interrupt 13 extensions, so some older computers may show problems.
See Microsoft Knowledge Base Article Q240672 - Setup Does Not Check for INT-13 Extensions.
Windows 2000 Setup does not determine BIOS INT-13 extensions are enabled or available for use before allowing the creation of a system partition with more than 1,024 cylinders, or typically larger than 7.8 GB.
Apart from this, Windows 2000 does away with the partition and disk size limitations of Windows NT.
If you have to use NT nonetheless, here is some information.
Depending on your BIOS, your disk geometry, disk controller and possibly other factors, any partition carrying NT files that are needed for booting may not work if it extends beyond 2 GB, 4 GB, or 8 GB down the disk. It may even depend on whether any crucial file like NTLDR or NTOSKRNL.EXE happens to be located in front of or behind one of these barriers in the partition.
Therefore the only absolutely safe method is to have the entire NT itself within one partition that lies within the first 2 GB of the hard disk.
In most cases the limitation is that the active partition containing the files needed for initial booting, like NTDETECT.COM, NTLDR, and BOOT.INI, has to be 7.8 GB or less. Other partitions, like the one that contains the system root (most of the Windows NT files), can be bigger. However, there is conflicting information about size problems of that partition, so problems might occur there too.
You can then use any other partition of any size to install other software or store data.
One absolutely safe way is to install NT into a 2 GB partition that's located at the beginning of the hard disk and used for booting and system loading. Then you can use NT's Disk Manager to turn the rest of the disk into one large partition.
Hint: If you prefer, you can give the first partition containing NT the drive letter D: and the second, large one the drive letter C:.
>> Begin instructions for drive letter swap
In Disk Manager, change the C: drive to X: (or anything). Reboot. Change D: to C: and X: to D:. Reboot again.
If you installed Windows NT on C: but later want to use it on D:, you have to do an extensive search and replace session on the entire registry, replacing all relevant occurrences of C: by D:. You may also have to search other configuration files like INI files.
Should any of the services not start or even hang your computer, you have to do some repair work, but this is, fortunately, rare. Lotus Notes Single Logon is a nasty offender. Disable it before you begin the drive swap.
Note also that there are some utilities like PowerQuest's DriveMapper, which pretend to do this work for you, but they do it very poorly. Do not rely on any such utility alone.
<< End instructions for drive letter swap
If your disk is larger than 8 GB, you need to install the current NT Service Pack.
The current NT boot sector cannot boot from any partition if the NTLDR file is outside the first 2 GB (see also the Microsoft Knowledge Base article Q192104: Windows NT Does Not Start If Primary Partition Is Above 2 GB). A fresh installation into an empty partition may be OK, but rearranging like defragmentation or resizing with Partition Magic could move this file outside the 2 GB range and render the system unbootable.
The boot sector written by WINNT.EXE and SETUPDD.SYS contained in Service Pack 4 solves this problem, but to write it one would have to exchange these files on the install media and do a fresh installation or a boot sector repair, or one would have to use other means to get the new boot sector into an existing installation.
As long as you don't have the new boot sector, any partition that contains the NTLDR and is larger than 2 GB is not entirely safe.
A problem still exists when not booting from the first primary partition. This problem is not yet solved in Service Pack 4, we can hope for a solution in a subsequent Service Pack. It is therefore recommended to make the first primary partition active before installing NT.
NT Setup can only create FAT partitions up to 4 GB. If you create and format the partition by any other means, for example from NT's own Disk Manager or from Partition Magic (www.powerquest.com), you can create larger NTFS partitions.
The BIOS imposes another limitation at 7.875 GB (1024 cylinders x 256 heads x 63 sectors x 512 bytes, or 8064 MB). This is caused by the BIOS INT 13 service, but only for the partition that holds NTLDR, and some drivers get around it as described below. NT Setup will gladly install NT into partitions larger than 4 GB, it just cannot create them. Also the normal emergency repair procedure fails beyond 4 GB. Partition Magic also allows you to extend an existing partition without losing its data, but the 7.8 GB limitation for the NTLDR partition still holds. See http://support.microsoft.com/kb/197667/ for more info on this limitation.
Exception 1: Newer BIOS versions should have an extended INT 13 service that does not have this limitation. However, NT up to Service Pack 5 seems to have a problem using the extended BIOS service.
Exception 2: Many SCSI and IDE controllers can boot from large partitions, provided the SCSI BIOS is disabled for SCSI disks, the BOOT.INI syntax uses scsi(...), not multi(...), and the driver (ATAPI.SYS in the case of IDE) is in the root as NTBOOTDD.SYS. You'd have to test that. If it works, you can work with only one large partition. If this is set up properly and if the SCSI controller doesn't cause any problems, then the driver, rather than the BIOS INT13 service, is used for booting.
You can also borrow another hard disk, install it temporarily and install a temporary copy of NT into it, or you can remove your large drive and put it into another NT machine temporarily. Then you can use Disk Manager to partition and format large partitions.
There is a method to use an automatic installation script and insert a command to extend the partition later to the available drive space. Under the [unattended] section include the lines:
FileSystem = convertNTFS
ExtendOemPartition = 1, NoWait
This will extend the partition to the size of the drive. The only thing to remember is that it needs a partition of no less than 130 MB to copy the setup files to before you can start the install.
Addendum: ExtendOemPartition has a known bug. It corrupts the partition if the disk is greater than 4 GB (KB Q185773). This is fixed in SP4. You have to replace some HAL files with SP4 files (see Microsoft's support website for details).
Further Microsoft Knowledge Base articles possibly relevant to this problem are:
Installing Windows NT on a Large IDE Hard Disk
ID: Q197667
Windows NT 4.0 Supports Maximum of 7.8-GB System Partition
ID: Q224526
IBM DTTA-351010 10.1 GB Drive Capacity Is Inaccurate
ID: Q183654
Error Message Running Emergency Repair Process on a Computer with a Large IDE Hard Disk
ID: Q224087
Incorrect Drive Size with Promise Technologies Ultra DMA Card
ID: Q195898