Actually, lucidguy, you misunderstand:
You are mixing up terms, sizes and file systems and Operating systems.
When your computer boots, the only way for Windows NT(as in NT 4.0, which of course this thread isn't even about) to access your hard drive is to use a set of BIOS functions known as "Interrupt" (as in INT 13). When INT 13 was developed, today's large hard drives weren't even available and INT 13's limitation of 7.8 GB wasn't a problem. So, Windows NT 4.0 can't access more than 7.8 GB during the first stages of the boot process; thus, the system partition is limited to 7.8 GB.
Newer operating systems such as Windows 98 and Windows 2000(hmmmm, the operating systems this thread actually IS about) don't have this limitation because they use a newer extended INT 13 that can address more than 7.8 GB.(a SCSI controller with options for drive translation disabled, is a caveat however)
BTW, What was that crap about linux users being "better" than other people you were talking about in another thread? Is this what you're talking about? Geez