Alright, so my HDD isn't giving the full space that it should.

Name: Seagate Barracuda 7200.8
Size: 250Gb
Model: ST3250823A
S/N 3ND0JGNB
Firmware: 3.02

Ok, all good so far.

Problem: I'm only getting 127Gb space from it. I have no idea why.

Please help.

Sincerely, Phallan
Assuming you have Windows XP... (You gave US very little info)
Right CLICK on My Computer, then click Manage. From there click on Disk Management to show you a graphical representation of your physical disks. Find the drive in QUESTION and verify that the drive is partitioned completely.Due to BIOS limitations as well as those unique to Windows®, partitioning and formatting drives larger than 137 Gigabytes without proper DRIVER or controller support will result in data loss when storing data to the drive beyond the 137 GB Barrier.

http://www.largeharddrivesupport.windowsreinstall.com/

What is the make and model number of your computer (if brand name), otherwise the make and model number of your motherboard?

What operating system and service pack level are you using?