People do have larger drives, but I bet they are all external... this thread is about internal drives. Really hard to find a small internal scsi and expensive to find an scsi/ide converter that will actually work. I agree that a card reader is a much better idea on so many levels. You don't need more than 2GB of storage for a machine with 32MB of RAM (and if you do, you can get another card, or just pop it in your PC and grab what you need).
I doubt that drive heat would really cause a problem since you wont find a 10k drive. It may be possible, but I have yet to see an MPC overheat even in some unbarably hot/humid rooms. On external drives, it rarely an issue, but dependant on how efficient the enclosure is.
For an easy buy on external drives, just check ebay. There are drives on there that are specifically tested with the MPC. If you ultimately want a giant drive, that is the way to go.