That's what I have suspected

Unfortunately, I have rather small HDD on my laptop, an my main OS is Windows XP, since the software, that I am using, does not work on Linux.

Therefore, I would rather use a filesystem, that Windows can recognise, since I cannot dedicate some GB for ext3 filesystem just for storing my backups. Since FAT32 has obviously some limitations, do you think, that NTFS would be OK? (probably I would have to use captive NTFS driver - have not tested this yet .

Alternatively, maybe there is a way to split the image file into fragments smaller than 2GB before compressing with gzip??? Since I am not so well acquainted with Linux commands, if you know, how to modify my pipe sequence given in the original post to include splitting the image into fragments, please let me know. In such case, please suggest also the proper command for restoring the image from such a splitted image.