There's really no extra hastle with a 200gb hard drive, it just requires you to reflash your bios with a modified one with LBA48 compatibility. Otherwise, they install the same.
It really depends on what is cheaper for you. 120GB hard drives can often be found for around $80USD, while most 200GB hard drives will always cost around $200.
Also, 200GB hard drives are more prone to fragmentation, which may slow things down a little if you are constantly deleting things. But this should not cause a problem, as it is rarely a problem.
Also, how many games will you need on your hard drive? My 120GB is full at 48 games, and a 200 would hold around 75 games. But then again, a 200 may sound good, but it's price tag may not be in the sam range as a 120Gb hard drive.