OS 7.6.1 can only boot from 2GB partitions, but can use anything you have left for non bootable partitions. OS 8.1 can boot from larger then 2GB partitions.

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This is not quite correct. I have several PPC machines running 7.6.1 that boot off of a 4 and 9 gig drives. If I remember correctly, it was only true for 68k models (2GB limitation in ROM or something).

The early PPC macs had issues on the nubus when using SCSI cards and any other card that did bus mastering (like video capture cards), so you are stuck with the internal SCSI if you want to do audio work.

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Also not quite correct. ATTO was a pain, but FWB Jackhammer (both Nubus) gave me no problems on various 7100/8100s with 7.6.1, AM II and/or Sound Tools+ 442. I haven't tested SampleCell or any video capture, though.

Drives were formatted with FWB HDT 2.5.xx or 3.x.x, can't remember

Here's one interesting excerpt from FWB FAQ re. Nubus Jackhammer that I saved many moons ago:

Can I use an array volume as my startup volume?

Yes, IF your machine has SCSI Manager 4.3 in ROM, you can start up from a striped, spanned, or mirrored array volume. Machines with SCSI Manager 4.3 in ROM include all Power Macintosh (and later) models (but no PowerBooks except the PB3400 and later models), Quadra 660AVs, Quadra 840AVs, and NuBus Macs with SCSI JackHammers (the JackHammer makes it appear to the system that SCSI Manager 4.3 is in ROM)

Note

If you have SCSI Manager 4.3 only by way of a Hammer Storage NuBus SCSI JackHammer card software, you can't array devices on the JackHammer bus with devices on buses without SCSI Manager 4.3 (in this case, for example, devices on the native bus).