if you have formatted it to ps2 format, WINDOWS shouldnt recognise it at all, except in programs like hdhandiness, etc.
Check to see if there is more then one partion or unused space. Right click on 'My Computer'>Manage> Click Disk Managment in the Tree on the left it should be under Storage. On your right you should see two frames look at the bottom one it has your CD-Rom and Hard Drive devices and what drive letters they're assigned to. Look for you 120GB drive (or rather 31GB) and see if it has a bunch of unused space or just multiple partitions that have yet to be NTFS or FAT32 formated. Thats all I have for you. Other then that are you sure its really 120GB or did your buddy sell it to you.