You need to use a partition editor like GParted to resize or create new partitions.
Each partitions is treated as a separate hard drive by your operating system, C: D: E: etc.
You can use the whole 120GB for Windows (or whatever OS you are using) or split it up 60GB for Windows, 60GB for data or however you like.

If you used a system restore disc there may be a hidden partition which will show up with GParted. If that's the case I would leave that partition in tact.