There should be a big thread about it on AccelerateYourMac, but the gist is that the controller for the primary channel (which is not the same as used for the secondary channel with the CD-ROM and Zip) has UDMA problems above a certain ATA level. The issue is not with slave drives, but with drives much above the minimal performance level of the original 6gb drive.
The canonical way to deal with the problem is to either upgrade to a rev 2 board, use a PCI ATA controller or use SCSI. Some people have also reported success (albeit with a performance hit) by using an older 40-pin (IDE, not ATA) cable on the primary bus. Basically, this limits the controller's ability to use the higher DMA/UDMA levels, even if the drive supports them.
John