The SFF case can only have one hard drive in it. The other cases can have up to two drives.
Most new hard drives use Advanced Format now. There is a Wikipedia article on Advanced Format at:
http://en.wikipedia.org/wiki/Advanced_Format
Basically, drives have their storage split into pieces called sectors. Because drives keep getting more and more space on them, the original size and method of tracking these sectors became obsolete. The old method can be used on drives that are fairly large (up to 2 TB, I believe), but its efficiency goes down as the drive gets bigger.
I have not seen any current drives that do not use Advanced Format that are larger than 512GB recently. You can load compatibility software to make Windows XP be able to use Advanced Format drives, but it will not support it natively. I assume that the Dell you are talking about has XP on it, and the motherboard itself may or may not be happy with Advanced Format drives (the drives used to come with a jumper on them so that they could pretend to be old style drives - but this is no longer offered any more).
Basically, the Western Digital Blue model WD5000AAKX drive that I mentioned will work in the system, and it is one of the few that can work.