Dell Inspiron 1000 Laptop--New HDD not showing its full capacity.

Most laptops that use the IDE, or Parallel ATA (PATA), interface for the hard drive have a BIOS support limit of 137 GB.  There are only two BIOS updates available for the Inspiron 1000 on the download page (A07 and A08) and neither mentions the addition of the 48 bit LBA support necessary to support a larger drive.  Since you are having difficulty exceeding this limit even using the software provided by the drive manufacturer, I would conclude that your BIOS has a limit of 137 GB.

It is possible on some computers to exceed this limit by using a Windows XP installation CD that incorporates service pack 1 or later.  The BIOS disk routines are used only on start-up, after which Windows uses its own IDE drivers.  Win XP SP1 has the 48 bit LBA support so it has no trouble using larger hard drives.  The problem with doing this, however, is that the disk is occasionally corrupted during the start-up phase when the BIOS routines are in use.  When this happens you must normally reinstall Windows to get everything working again.

There are overlay programs that can be used to replace the IDE routines in the BIOS ROM to get 48 bit LBA support, but these programs are subject to corruption like any other software.  The last one of these I used was Max Blast, and to be honest, it worked pretty well.  The safest course, however, is to use a 120 GB hard drive.  If you really need more space than that you may wish to consider a new laptop.  All the newer laptops use SATA drives and don't have the 137 GB limit.

Although the technique of limiting your C drive to less than 137 GB may decrease the probability of drive corruption, it does not eliminate it.  You are still using the BIOS to access the drive during initial boot, and the BIOS doesn't care about partitions.  Make certain to keep frequent back-ups of any data you wish to keep, which is good advice even if you don't have a 137 GB limit.