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There's no longer any real reason to use the native Photoshop file format - psd. Tiff does everything psd does and bumps the file size to 4 gigs. If you do decide to compress your tiffs, use zip, especially if you've got 16 bit per channel files, as LZW can often save larger files than uncompressed with those. If you know you're going to exceed 4 gb, then you have to use psb, but because of the compression schemes it uses, the save times are quite long.
You should be able to save your psd files with no problem up to 2 gb. Sometimes, when Ps is making the calculation for the projected file size (remember that psd files are compressed) and you're already close to the the 2 gb limit, you can get a file too large error, or worse, it can save, be over 2 gigs, and not let you re-open.