Target not large enough may be one of more than one problems.
It could be that the image came from a Series 2 TiVo back when they were shipping with Maxtor drives back when Maxtors had a slightly larger LBA number than other brands when comparing models being sold as the same size in GB.
So a 40GB WD or Seagate isn't big enough if the image was taken from a 40GB Maxtor, and if it was an 80GB Maxtor, an 80GB Seagate or WD won't be big enough.
And I don't think you can trim the swap partition size enough to shoehorn it, either.
Of course you can restore that 40GB Maxtor image to a 60GB or larger drive, and then expand, and that'll work (which is good to keep in mind if your S2 came with a larger than 40GB drive but you can only find a 40GB image).
Then there's the other version of target not large enough, where it actually is large enough, but there's something funky going on with the drive or the software previously on it.
I just went through that with a TCD140.
As for leaving out swap, it could be that you caused it to go with whatever swap size the original had by not telling it any different.
Instead of stockpiling 80GB IDE drives, read through the SATA/IDE adapter thread
keeping in mind that it spans a few years and there are some things we know now that we didn't when it started, and maybe start looking for a New Old Stock 1TB SATA drive made a few years ago.