Would need to know the actual model to know for sure, but since it appears that you have an older G4, most of them only supported HDD's up to 128GB as is. But the last 2 or 3 models to come out (Quicksilver 2002 & later) did remove that limitation by way of a better, more up to date motherboard controller.
However, for those older ones, you can buy a pci controller card that will allow any size of HDD...... but at this point in time, I would suggest moving up to SATA if you are going to go this route....simply because the prices for SATA drives are the same or lower than the IDE drives, SATA is way faster, and will allow you some forward-compatibility should you want to get a newer machine in the near future
SATA cards are available from SIIG, Sonnet, Firmtek and a few other mfgr's. They usually run ~$60-80 depending on where you get them......check around online but make sure you look for a mac-specific card......those el-cheapo $15 windblows cards wont work in macs
But regardless of what HDD you put in there, YES, 10.4 will run on G4's quite well as long as you have at least 1GB of ram and a video card that supports QuartzExtreme (offloads the screen effects processing from the cpu to the video card)