OS 9 doesn't have an issue with large drives-it's a function of the hard drive controller.
Intell can give a much more detailed and specific answer than I, but the hard drive controller used in many Macs is capable of actually reading and supporting drives larger than 128gb. The caveat is that you generally need a software-based solution to "unlock" this feature. This creates something of a catch-22, as the software won't load until the OS is loaded. The work around is to have the first partition on the drive be less than 128gb, and install your OS only on that partition.
You can also put a drive larger than 128gb in any Mac that doesn't natively support drives larger than this without any sort of 3rd party software-you just won't be able to access any of the space over 128gb.
Other than that, you can use pretty much any 44-pin, 2.5" laptop IDE hard drive in your TiBook.
I have a 100gb 7200rpm drive in one of my Tis, and it actually works fairly well and perks up the computer nicely. The caveats are that it sucks up a lot of battery power. I removed it from my 15" DLSD Powerbook, but like the TiBook the drive sits right under the trackpad and I also found the vibration from the drive uncomfortable in use.
Three of my Aluminum PBs have SSDs in them(one of my 12", as well as my 15 and 17" DLSD). I use 128gb mSATA SSDs when I do an installation myself-I've been paying around $45-$50 each for new Toshiba drives in this capacity on Ebay. I then put them in this enclosure
http://www.ebay.com/itm/321612695170?_trksid=p2059210.m2749.l2649&ssPageName=STRK:MEBIDX:IT
(Mods: Not my auction-just something I've bought and used), which I really like because it has the same form factory as a 2.5" IDE drive and literally is just a drop in replacement. I've also had these-briefly-in TiBooks, although mostly for testing and set-up and not for long term use. At least in those roles, they worked fine.
From pretty extensive experience, I can say that these adapters have an "overehad" of about 8mb/s. Otherwise, I've found that they'll more or less saturate both an ATA66 bus(as in the TiBook) and an ATA100 bus(as in later Al books). This is based on Xbench testing, which consistently showed a maximum sequential read speed of about 8mb/s slower than the rated bus speed of pretty much every computer in which I've used these adapters.
A good 7200 RPM HDD will get you close to saturating an ATA66 bus(I think I got mine up to about 50mb/s under certain operations when it was in my DLSD), but the SSD(unsurprisingly) does a lot better in random read/write operations. Of course, as I mentioned earlier, 7200rpm drives have their drawbacks in a laptop, and a most 4200rpm and 5400rpm drives(4200 was typical around the time the TiBook was built, although 5400 rpm is probably more common now) show a pretty big performance hit compared to an SSD or even a 7200 rpm drive.
As budget permits, I plan on upgrading at least one Ti to an SSD for this exact reason. As I said, I could not possibly be happier with them in my much later Powerbooks.
