By the date it should have 28bit lba support, which menas up to 128GiB is supported.
Are you using CF or SD to ide converters right? A 32gb should be plenty of storage and compatible.

How to make a "FORMAT A: /S/Q/U" floppy in Windows XP command line ?
- I get error "/S" is not a right command or so...

Yes. I found BIOS Phoenix V.4.08 seems right for the laptop (03/27/2001 "Now with this update hard disks with more than 8.4 Gbytes are supported. The upper limit is now 128 Gbytes.")
1.) Create a bootable system floppy disk with the command "FORMAT A: /S/Q/U".
2.) Call the "720pv408.exe" file at the MS-DOS level and copy the unpacked files to the system floppy disk created in point 2.
3.) Boot the device from this disk. The BIOS is then transferred automatically.
4.) After transfer you are prompted to restart. Remove the floppy disk from the drive for this.
5.) Press F2 to activate the setup. Load the Setup default values once and check your parameters.

You can't do "format /s" in Windows XP. You can create a basic bootable DOS disk through the GUI though.

It's a checkbox on the format dialogue, when you right-click the floppy drive and select format.

So close...
So in Windows XP I click MB3 on Floppy A:\ and select Format then check these boxes:
1. V "Quick format" same as /Q
2. V What equals /S in XP ? ( S=Copies system files to the formatted disk.)
3. V What equals /U in XP ?

"Create an MS-DOS startup disk." is the option you want.

The process in Windows XP is to write a sector image to the floppy disk, so the quick option will be greyed out, since every sector needs to be overwritten anyway.

The /U switch in DOS instructs FORMAT not to try to save unformat information. Windows XP's format doesn't perform this step, so this option is unnecessary.