PC Exchange 2.1.1 and earlier has a problem when trying to copy a file that is approximately half the size of the available free space or larger to a DOS formatted volume. Currently, the only work around is to copy files that are smaller than half the size of the available free space of the DOS formatted volume. In some cases, it may be necessary to segment a very large file into smaller pieces.
Apple is aware of the issue and is working to correct this problem in future versions of PC Exchange and the Mac OS.