You still may be able to buy 160GB drives, but generally there's no point to it. The cost per GB goes up too high, and with Newegg there's a shipping charge on them.
People are saying the new Seagate Barracuda 12 series are quite decent. I have a 320GB for the system drive on my latest computer,works fine, and it's quiet.
It's on sale ATM @ Newegg;
http://www.newegg.com/Product/Produ...69&cm_re=320GB_Seagate-_-22-148-469-_-Product There's a promo code listed for this price, and it's good until Sept 13.
You're still going to pay a small price penalty for the small drive, but 38 bucks delivered is a good deal, IMHO.
I understand where you're coming from, and I wouldn't have a system drive larger than this one. I even partition that, to allow half the drive to collect temporary files. The real storage is on the other volume drives in my systems.
The 320GB Seagate is a single platter drive, and it should be as fast or faster than anything smaller, (7200 RPM), due the the high density storage.