Fraps is a pretty bad program when it comes to lossless codec efficiency. Its pretty morbid. The 160GB would be fast enough if that's all you used it for so it could sustain maximum sequential write speeds.
As for HDD size, its always less than the advertised amount after formatting. Advertisers use the base 10 version of 1GB, not the computer version, even after having been sued. Its misleading.
Quote from Wiki:
"Manipulation of measurement units and standards
Sellers may manipulate standards to mean something different than their widely understood meaning. One example is with personal computer hard drives. While a megabyte has always meant 220 (1,048,576) bytes in computer science, disk manufacturers began using the metric system (SI) prefix meaning of 106 (1,000,000) as their hardware standard. By stating the sizes of hard drives in hardware 'megabits' of 1,000,000 bytes instead of software 'megabytes' of 1,048,576 bytes, they overstate capacity by nearly 5%. With gigabytes instead of gigabits, the error increases to over 7% (1,073,741,824 instead of 1,000,000,000), and nearly 10% for the newer terabyte/terabit. Seagate Technology and Western Digital were sued in a class-action suit for this. Both companies agreed to settle the suit and reimburse customers in kind, yet they still continue to advertise this way.[5][6] To help combat this problem, a number of standards and trade organizations approved standards and recommendations in 2000 for a new set of binary prefixes, proposed earlier by the International Electrotechnical Commission (IEC), that would refer unambiguously to powers of 1024. These new units are numerically identical to the established computer science convention, easing transition. Other operating systems either continue to use the older computer science convention (Microsoft Windows), or have switched to the new units (GNU/Linux), which are numerically identical to the older convention. Thus disk hardware on these systems still reports the actual capacity, which is lower than advertised..."
I think you could do just fine splitting the 1TB hdd into 2 partitions, 1 for OS, 1 for programs and data, and the 160GB with just 1 big partition for recording and scratch disk space.