Indeed, older computers often don't support 48bit LBA, which is needed to operate HDDs larger than 120 GB.
At first, please check if there is a Bios update for your computer.
Apart from that, modern operating systems don't mind about such Bios restrictions since they use their own routines for accessing storage devices. This is valid for Windows 2000 SP4 and XP SP2 and later, also true for most recent Linux versions.
In such case, create a partition not larger than 120 GB and install the OS there. Make sure, you apply latest patches. Then you can create more partitions on the unused HDD space.
The other option would be to install a PCI IDE (or Sata) controller card where you can connect your new big HDD to.
You may do some reading on www.48bitlba.com