I went into the office yesterday and contacted a friend of mine from Russia to translate the web pages for the internal hard drive. It comes with an external controller with a 2 digit display. When "00" is displayed it acts like the original hard drive or floppy drive on the 2000. Any number greater is the "virtual" floppy drive in its internal memory. This would allow the apearance of having 99 different floppies stored inside the machine.
There were no technical specification on how to hook it up only operating instructions (pressing the 2 buttons to go down or up on the counter). That means if you need disk 99 you have to press the up button 99 times to get there. Pressing the 2 buttons at the same time returns it to zero.

My friend said he would provide a complete translation of the site and documents for me but I told him the information based on his verbal translation was not what I was looking for anyway.

TomTomSF,
I suspected what you had written about the devices. The Russian device uses a hardware based solution to fool the PSR OS into thinking it is the same floppy device it has always worked with. It still thinks it is limited to 1.44K. Pretty clever solution in a way.

I looked at floppy drives (for replacements) and regular ones cost from about $7 and up. I don't know what connectors it uses IDE, SCSI, USB, etc. So I'm not sure what kind of connector could be used to connect a PC to that to fool it using software to a PC.
Without changing the operating system or knowing how the hardware is configured inside it is hard to determine what to do.
My friend from Russia told me there are a lot of scam people in Russia (he just returned from a trip from there) and the black market for software/hardware is very large there as well. From the site itself it seems to be ok on the surface but did not go into any detail related to the 2000 which is what I was looking for in the first place.
I read the Styles Groups report and it seems that it is a valid thing to do and makes sense. The question and answer part was extremely informative especially with the pictures. I recommend everyone looking at message 16178 (mentioned above).
If anyone gets it let us know. This is quite the thread and is building up a lot of anticipation. My floppy collection of Midi/Karaoke/Styles/etc. is growing daily.
Does it change any warranty information on the machine if you open it up and start soldering things inside? Make sure you ground yourself first before doing stuff like this!

Keep the information coming. This is great.

- Brian