I did a FAT32 format on my external HDD and that corrected the problem. My 32-bit Windows ME now supports the entire 160gb external drive.
Now, as for my external USB memory card reader, I installed the driver which came with the reader. This corrected the problem. My OS can now read and write to the card reader. It even works with SDHC cards.
I hope this information will be a benefit to others.