Although I dicked around with my 1TB a few months ago and got it to work... I saw this write up the other day. I found one of the keys was the original fat32 formating. The following sums it up pretty good. It talks about fat and wbfs partitions... but the method is the same... even if you plan on just having a wbfs partition only.
Wiihacks - Nintendo Wii Hacks Community - View Single Post - How can I use one drive for ISOs and movies?