The good folks at Gamerscoreblog
have posted an very good step-by-step instruction process on how to transfer your info from your current 20GB HDD to the new 120GB HDD, either as a stand alone for your current console, or to a new Xbox 360 Elite. The process is different from one to the other primarily due to Arcade Games being tied directly to the console that downloaded them.
created a couple of video demonstrations of the transfer process. You can find them for WMV HERE
and for MP4 HERE