Hi,
Understand that the same topic has been submitted in Idea section ( http://community.wdc.com/t5/Network-Drive-Ideas/Set-partition-size-for-TimeMachine/idi-p/158774) for MyBook Live to have ability to set maximum partition size so it won’t fill up the entire disk.
However, after struggling for some time on this issue, I found workaround to limit the TimeMachine image size.
Here, I am using Mac OS X 10.6.7 and MyBook Live 2TB.
Please find the link below for the details:
http://untoro.wordpress.com/2011/06/07/how-to-limit-space-used-by-time-machine/
Comments and valuable inputs are very welcome as I am not an expert on this.
Thanks.