Introduction
The current size of external hard disks (USB or FireWire) let some users express hopes and questions about transferring or even sharing files between Macintosh and Windows computers using such media.
We chose to write down some of the basic conditions one should never forget when trying to implement such schemes. We hope this will help you to get a clear picture of the matter before going too far.

Disk Size Limits under Windows
The FAT32 volumes are limited to 127GB under Windows 98SE. Recent versions of Windows (ME, 2000 and XP) support all sizes of FAT32 volumes. The format utility, under Windows 98SE and ME, displays false data from 64 and 80GB, respectively, but works correctly. On the other hand, Windows 2000 and XP can't format FAT32 partitions of more than 32GB. One has to use third-party tools to format the drive. The NTFS format supports all sizes under Windows 2000 and XP, but this format is not supported by the Macintosh (see below).

Disk Format and Size Limits under Mac OS
Mac OS (more precisely, the File Exchange control panel) manages FAT16 and FAT32 disks. Mac OS X, up to 10.2, doesn't manage NTFS disks. From 10.3, NTFS disks are read-only.
The only format which can be used freely (without using a special utility) with huge modern disks is therefore the FAT32 scheme. However, Mac OS X doesn't manage FAT32 volumes of more than 137GB. Please note that a 250GB disk, for instance, can be partitionned in two volumes of 125GB (with Partition Magic or the like) and will then be managed correctly, at least under Mac OS X (you can't rename the volumes, but this is a minor problem).

Hybrid (Mac/PC) Partitioning?
Sector 0
In principle, it is not possible to put on the same disk a Macintosh partition and a FAT16/32 (or even NTFS) partition. The Macintosh partition scheme uses the sector 0 as a volume descriptor (even if the end of the sector remains unused). The MS-DOS/Windows partition scheme (which is also used under Unix and Linux) uses the sector 0 to contain the bootstrap code (if any) and a partition table at the end of the sector. Therefore, they are incompatible.
Iomega Solution
In the past, some companies have used the fact that the end of the Macintosh sector 0 was empty to put there the MS-DOS/Windows partition table. A normal driver should choke on such sectors, because the first bytes (0x45 0x52) indicate a Macintosh volume, while the last ones (0x55 0xAA) denote a MS-DOS/Windows volume. One should note that, with Iomega Zip Tools cartridges, in particular, one had to use Iomega drivers to be able to read the data stored on the disk.
Unix Solution
However, some fearless Macintosh/Linux users have found ways, using some rather obscure features of software mounting tools, to achieve a so-called hybrid partitioning scheme. See the information given on Mac OS X Hints. The partitioning scheme is the MS-DOS/Windows/Unix one, and a disk mounting tool mounts a HFS volume stored in one of the partitions. Such a volume can't be read directly by a Macintosh, and can't be used to boot the computer.
Let me add that I would not put critical data on such a medium ;-).
Other Solutions
If the price matters, use FAT32 volumes under 120GB and you get the free solution you want.
If the efficiency is a premium, use MacDisk. Latest version 7 was successfully tested with HFS+ disks up to 250GB.