firstly lilo doesn't need to be in the first 8 gigs. lilo can only ACCESS partitions within the first 8 gigs. not being picky, but it is a difference.
secondly, that 8 gig limit is old now, and md80 / md81 don't have that problem anymore anyway. as long as your lilo version is over 21.3 then you haven't got a problem at all. so lilo will go on the MBR of the drive.
Personally what i used to have was a 4 gig windows system drive, then a /boot sector so linux can boot, then a large fat32 partition for general use, and the linux system at the very end of the drive (20gb) on one / partition.
i'm not sure what you mean by md not 'doing' fat32 tho.
nice title btw!