well to start I'm surprised that computer would support a 120 gig drive

in fact I doubt it will/does
and then second even though your just swapping over a new drive I never really like the idea of just doing a copy I believe in the "fresh install theory" especially from an older drive to a brand new one
the other question I would have is you said it detects both in bios but doesn't boot to windows have you tried removing one of the drives {ie just boot to the old one or just the new one}