If you are reinstalling the OS anyway, just boot to your Windows DVD, on the "where do you want to install Windows" screen, click on Disk Options, and delete all the partitions listed, then create a New partition of 120GB (or 122980MB if you want it to be exactly 120GB), install to that partition.  Once Windows is installed, go to Disk Management and create a data partition with the remaining space.
We have a new T110 II that came configured RAID1 with the 'C' partition at 40GB, 'D' partition at 420GB.  We want to repartition to have the 'C' at 120 or 140GB. We will then reload the OS and go from there.  I cannot find anything in support that begins to show how to do this.  We just need to crunch the C&D Partitions and change the sizes.  Anyone have an idea of what document or manual contains that information? 
Repartition C&D drives new T110 II w/PERC H200 running Raid1 on 2 500gb HDD.