Michael Hill found that the Mac OS 8.1 Installer refused to install an updated disk driver, noting correctly that his drive was a non-Apple drive. Richard Kinne had this happen to him even though his drive was an Apple drive. However, in both cases, using Drive Setup 1.4 (included with Mac OS 8.1) worked.
On the other hand, another reader claimed he could not get Drive Setup 1.4 to work on his Apple drive (found in a Performa 6116 CD). Drive Setup 1.3.1 did work.
Then there's Mike Lambert. He got a blinking question mark startup problem on his UMAX clone after updating with Drive Setup 1.4. Reverting back to 1.3.1 fixed it. I hope this does not signal the return of this frustrating problem.
In general, as noted by Larry Perkins and others, Drive Setup 1.4 appears to work with more third-party drives than did previous versions.