Having eight Xserves, all with four 60GB drives in them, I went off to BestBuy and bought all 30 of the 250GB drives they had on sale for $125 each, went back to my data center, and started work on moving them over. Here comes the tip...
Usind an old hint that I found, I downloaded psync to start the transfer on one of the boot drives on a spare server. After psync did its thing, I then cracked open the Terminal to 'bless the new drive:'
$ bless -folder /System/Library/CoreServices
You DO NOT need to bless it for OS 9, as the Xserve won't boot into it. I put the new sled in, and presto ... all 35GB of data was over, and I had about 200GB free now. So for the cost of roughly six sleds, I was able to update all 30. I know most people don't have Xserves, or eight of them, but this is one of those hints I wish I'd have found six months ago.

