160gb hd showing up with 127gb?

I just got a new Seagate 160gb drive, and after formatting it with Seagate's DiscWizard for Windows, it's showing up in My Computer with only 127gb! It mentions compatibility issues for drives over 137gb... so wouldn't it show 137gb instead of 127gb? Still, that's obviously not what I want either. Now, I'm running Windows XP with SP2, and I thought the 137gb glitch was only present if you don't have SP1... Is this a bios issue?
Anyway, after I saw the drive with only 127gb, I went into disc management and added a partition to the unallocated space (21gb).

So my main question is- unless there's an easy fix to get the full space of the drive in a single partition (that doesn't require booting from a floppy), will my current setup have any possible negative issues in the future? As it is, I have my 80gb system disc, and the new Seagate with two partitions- one 127gb, and one 21gb.
If there's no problem with this, I don't mind having two partitions...

Thanks in advance!

Windows XP SP2
Western Digital 80gb (system disc)
Seagate 160gb
Radeon 9500 Pro
1024 DDR333

 

There shouldnt be any problem with multiple partitions in your case.
Ya might need bios update/or there maybe option in bios to enable 48bit LBA?
Or Look here:
http://support.microsoft.com/default.aspx?scid=kb;en-us;303013
&:
http://www.48bitlba.com/