Update for anyone else who might be interested in using a 250GB DMS:
I exchanged the WD 250GB drive I had and assumed was bad for a new one. This one at least works in the Windows Phathack DMS Tools, where the other one did not. However, it would seem that there certainly are issues with Media Manager and the 250GB drives. 3.92 gives the "error retrieving DMS ID" that also happens with some other drives, and just won't work. That's a shame, because as a program 3.92 is the most stable (no crashes when updating the database, as I get in every earlier version), and it has the added benefit of being able to edit the voice prompts.
3.76 seems to work at first, but then I get write delay errors and the phtsys partition disappears.
I've gone down to 3.51, which seems like it might do. I did manage to create a playlist, transfer files and do a full save/eject without incident. However, it is sluggish at first loading the DMS (even with nothing on it), and I do get infrequent write delay errors and disappearing partitions. I'll see how it works and if it becomes too unstable, I'll go down to 3.42 and 3.22 to see if either of those works any better.
Music Manager does seem to work with 250GB DMS, but if it comes down to using a 250GB and Music Manager or a 160GB and Media Manager, I'll use the smaller drive -- if only because I much prefer to be able to have bands properly named with "the" or "a" and still be able to sort alphabetically (e.g. "The Who" instead of just "Who").