There are 2 ways to deal with BIOS limitations on hard drive size.
The 'cheap and dirty' way is to use the BIOS / drive overlay software from the hard drive manufacture.
The elegant method is to install a PCI IDE controller card.
Not only will this take care of the size limits, but for under $30, it will allow you to use the full data transfer rate of a newer drive.
Without looking at your motherboard specifications, I suspect it has a UDMA33 IDE controller. A PCI card with a ATA 100 controller will transfer data 3 times faster from an ATA100 drive.
The reason you lost the data when you changed the jumper on the 40GB drive, is that you then created a new FAT for the drive.
Chas