How is the external firewire drive formatted? If it is formatted in FAT32 (a Windows format), then files are limited to 4GB. If you format it in HFS Extended (HFS+) you'll be able to use files up to 16 TB (10.3 and later).
Usually in these cases you should get an error message.
Michael,
I see that you are a very heavy poster of replies. Thank you for your attention.
All my drives are HFS+, PC's (of which I have two here) give me hives. I have 4 Macs here and all have been fine until this problem.
On the web there are rather extensive discussions re this but I have yet to see apple or anyone crack this nut. Most of the forums discuss large file transfer with 10.1.x and up to 10.2, but not many for 10.4.8. A number of people talk about the firewire bus and how having isight plugged in can confuse it. I don't have my isight in the house.