Can I insert 120Gb HDD into my iPod Classic

Alex, yes you can. The model iPod that you list should have a 120 GB 4200 RPM ATA-66 hard drive with a ZIf connector. The only thing to watch out for would be the thickness of the HDD. Something like the Toshiba MKxx31GAL series should work without difficulty. They do go up to 240 GB. The only other thing I suggest is that you replace the hard drive cable as well. Make sure that you get one for your Drive. I have had trouble with replacing a Hitachi drive and using a Toshiba cable ;-) Hope this helps, good luck.