I set up a 1200 with a similar spec for a client, so here's what I did:
120MB partition for WorkBench
880MB partition for programmes
1GB partition for data
2GB partition for backing up the other 3 (create compressed file of each partition).
It's unlikly you'll run out of space with that lot, and if you do you can always pinch a new 1GB partition off the backup
The 44way IDE lead (used in laptops if your buying from a PC place) should be as short as possible, as the shorter it is the fewer data collissions and errors you'll get (less than 4" is fine, less than 2" and you run out of manovering room) - according to the official IDE spec, maximum lenth for a 40way is 440mm, but I've seen 1m ones that have worked fine @ ATA66.
One good reason for upgrading to OS3.9 is that you'll be able to use the whole drive, but you'll need to have a CDROM drive available to do that, which wont fit in the A1200 case.