Hmm... I don't mean to doubt you, but I don't think your Windows XP partitioning experience and the Mac partitioning experience are products of the same 128 GB limitation.
If you put a 160GB HD into a computer without 48-bit LBA, regardless of whether it's a PC or a Mac, RISC or CISC, PowerPC or Intel, you're just not going to be able to see the full 160GB whether you partition or not. The computer will only "see" 128GB of the drive, and if you create a 120GB partition, then you'll only be able to create another partition 8GB in size. The computer can only "see" the first 128GB of that drive, and partitioning the drive won't work around that. I think your Windows XP partitioning experience isn't due to the lack of 48-bit LBA addressing on that machine -- it's something else. 48-bit LBA addressing isn't Macintosh-specific, it's hard drive controller chip specific, and the chip either has it or it doesn't. Since the chips used in Macintoshes are the same as the ones used in PCs, it goes to say that it's not the platform that's limiting the size.
No matter how many or how big you make the partitions, the computer will only "see" 128GB of that drive.