Live CD locks up on install

[Husse]

120 MB RAM is just not enough to run the live CD
Around 300 MB is the minimum
If you have the possibility to make a swap partition the live CD can use it and you can go down in memory, but 120 MB is still really scarce

[newW2]

There is a tool called Parted Magic that you can get from Distrowatch. It's easy to use and this link
http://partedmagic.com/docs/gparted.html
to their documentation page, is a step by step guide on how to use Parted Magic to resize your existing partition, and add new partitions for your Linux installation.

[Husse]

you might be able to install with 120 MB and a swap but beware it will take the whole day. You'd be better off with some of the special low memory distros.
Damn Small Linux or Puppy Linux or Vector Linux

[MagnusB]

VectorLinux should be called Damn Fast Linux I run it at box wich is 4-5 years old, and it performs like a high end computer today
But I would suggest you using a textbased installer, since the liveDVD is pretty buggy with 256 ram, I guess it will be a living h... with half of that..