I bought an ATA-->SCSI converter so that I could use one big, cheap disk in my 8600. I can easily create partitions to install different operating systems and everything just works. I don't keep data on this Mac because it is just around for experimentation.
My decision for the ATA-->SCSI converter was based on:
1. I can upgrade to a bigger ATA disk if necessary (not sure if the controller will work with 128+MB disks).
2. The ATA-->SCSI converter will work happily in my 68K Macs. Even a Mac 512K with SCSI controller, with limitations.
3. Second hand IDE PCI cards for PowerMacs will become dirt cheap shortly, if not already. And IDE disks are even cheaper. So I am going to buy and scrounge them. SCSI disk that have been lightly used will become rarer. The ATA-->SCSI converter will keep my 68K Macs running on cheap/free hard disks.
I'll second Tom Lee on 4GB 50 pin SCSI drives from servers. Some people have experienced problems using Barracudas and others from Compaq servers, but experiment with formatting tools. Locate a formatter that understands the drive and does not perform a generic format. Apple's formatters, hacked or otherwise, will not do a good job. Use a third party formatter.