Have you entered your BIOS to determine whether or not you can choose a setting to allow larger HDDs, e.g., Automatic, LBA, or some other setting? Your computer may have a 120GB limit on the size HDD it can read/write. Dell has a BIOS update here for your Inspiron 6400. The Fixes and Enhancements do not include using larger HDDs, but it may allow it.
If neither works, try attaching the HDD to another computer and use the partitioning software to create 3 additional primary partitions @ 120GB. Don't change the settings on the original partition (it should be primary AND ACTIVE). After you are done you should have 4 120GB primary partitions and the first should be SET TO ACTIVE. You will lose the use of about 20GB, but you will have your OS and 3 other usable partitions.
Try the BIOS settings first.
Then try the BIOS update (the instructions are on the webpage).
Then try the operation on another computer.