I put XT-IDE's in all of my T1K's but I also like to keep the ROM usable in-case I want to use Deskmate or test something against the original OS. The smallest CF or DOM any of my XT-IDE's have is 2G so there's a ton of space to do whatever. Below is how I do this if you'd like to give it a go.

Load the setup program with /a and set the following: 

Primary Start-Up Device = DISK
Check for CONFIG.SYS on Drive = NO
Check for AUTOEXEC.BAT on Drive = NO
Hard Disk Chip Select = OFF (Disables the on-board XTIDE controller).
Press F1 to Update the EEPROM.

Boot Tandy DOS and use fdisk to create the 1st partition with the default 32M size.
Boot newer DOS (I use Compaq OEM 3.31G), create partitions 2 through x whatever size you'd like and format everything including the 1st partition. Put the newer DOS boot files on the 1st partition with format c:/s or sys c:.
Copy Tandy DOS to C:\TANDYDOS (My preference).
Copy Deskmate files to C:\DESKMATE.
Copy newer DOS to D:\DOS (Could be C:\DOS or whatever).

Reboot the computer and at the XUB banner press F8 to boot from the ROM. The system should boot into Deskmate or DOS depending on your BIOS setting. Exit Deskmate if you're there and verify that you can access C: (32M partition) and D: (ROM). If you created partitions 2 through x larger than 32M you wont be able to see them from ROM DOS.

Reboot the computer again and let XUB boot normally. After it boots you should be able to access all partitions minus the ROM. If you want to access the ROM from newer DOS configure Jeff's ROMDRIVE.BIN driver in config.sys on C:. Configure AUTOEXEC.BAT and CONFIG.SYS for the newer DOS on C: as needed. 

Now you can boot the ROM DOS and and have the original OS/Deskmate installs by pressing F8 at the XUB banner or boot into your newer DOS by doing nothing. I have several RL's and a TL/3 setup like this and it works great.