The default cluster size increases from 4kb to 8kb for partitions that exceed 8GB. For maximum space utilization, make your partitions no larger than 8GB. In general you want *smaller* clusters for the partition(s) where you'll store/load your operating system (Windows), which is full of many small files (less than 1KB).
You want *larger* cluster sizes for partitions that will be used to archive large media files, such as MP3s, video, and graphics. So, if you want to create a partition that is roughly 8 gigs to be used to store your MP3s, you'd do better to make it 8.1GB, rather than 7.9GB. This would increase the cluster size.
The default cluster size increases from 8kb to 16kb for partitions that exceed 16GB. The default cluster size jumps again for partitions that exceed 32GBs.
There's a known-issue with (trying to) create FAT32 partitions larger than 32GBs using Windows 2000 CD. (You will have no such problem is you use FDISK from DOS, like described here).