AFAIK you get 120GB only if it is RAW and not formatted to any file system like NTFS. But once you formatted it to NTFS you only get like 111GB of your 120GB.
You mentioned that you reformatted it, did you notice how many partitions you had during that time? I ask because you have a point, the missing space that you are looking for could be the other partition or the recovery partition.
EDIT:
May be this document can help you:
http://www.windowsreference.com/wind...ment-in-vista/