You can replace the hard drive in the Olive. It is not hard but there are some issues. You need hdreset.iso and to burn this image file to a CD and use this CD as if it was the operating system restore disk. Then you restore the operating system as normal with the OS recovery disk. Then reinstall your files. I can't recall where the file is posted and the instructions to do the replacement/upgrade but you should find it with some searching.

By the way, the 3.5" hard drive used in most Olives is an IDE connector, not SATA. There is one excpetion: The Olive Symphony. It has a 2.5" laptop hard drive and one needs to even take the motherboard out to replace this drive. It can be done, but takes some work and a good set of tools for working on electrical components.

Any external USB drive works fine with the Olive servers. Their manual is out of date. Just be sure you are using the latest firmware.

The music on the USB drive appears as normal, but is in a different location. This is just like a computer. When you list the contents of the C: drive it shows only what is on the C: drive, not what is also on the D: drive.

You can also use any external USB drive to back up all of your music on the Olive. Not a bad idea if you have a lot of time invested in ripping and organizing your CDs on the Olive.