Yeah, the PS3 only supports FAT and FAT32 hard drive formats, FAT32 being the better format still sucks and only supports 4Gb file sizes. If streaming isn't an option or if you want surround sound, your best bet (assuming you're referring to movies) is to find software that can split the file for you without hurting it's quality. Your second best option would be to find software that can re-encode or transcode the video so that it fits into the 4Gb restriction while maintaining a satisfactory level of quality. MPG4/H.264 is probably the best encoding format for quality and file size if re-encoding is your only option.
The PS3 OS does not use FAT or FAT 32 for it's hard drive. It does require the use of FAT 32 for usb media like external hard drives. If files larger than 4 GB will not copy it's not because of FAT 32. I have files larger than 4 GB on the PS3 hard drive. Originally they were .vob but I renamed them to .mpg and copied them over using Red Kawa's File Server. Now, I haven't done it in quite a while as they just took up too much space. Point being, files greater than 4 GB should load. If they don't it may be a flaw in a recent firmware update but it's NOT because of FAT 32 usage.
I'm surprised I seem to be the only person who knows about this. It's quite simple to put 4+ GB files onto your PS3. Just burn the file onto a DVD or Blu-Ray disc (as a data disc tho). When you put the disc into the PS3, find the disc under the video tab, hit X, highlight the file and hit triangle and then copy. Piece of cake.