UPDATE (from my original 10/14 post): I bought the drive from iFixit and received it next-day (overnight shipping). I'd have to say I'm very experienced repairing Apple notebooks, but working on the MBA can be a bit tedious. Here's a couple of notes for those venturing into the drive replacement:
Make sure the battery and bottom screws are R&R'd correctly. The battery can be damaged if reinstalled incorrectly, and the bottom can warp if it's not carefully reinstalled. The other difficult bit is working with the drive's ZIF connector. The cable (like many of its type) can be damaged, along with the connector itself. The iFixit guide is probably good enough, but the service manual (if you have access to one) has more detailed information on R&Ring the battery and bottom.
Another item is transferring the insulating/padding from the original drive to the new drive. There's a pad on one side (covering the entire side) which came off fairly easily and had enough "goo" to hang on during reinstallation. The other side was 3 pieces of open-cell, thin, foam. You'll probably not be successful in transferring them. They're there to provide a bit of relief to the cables running over the top (between the drive and bottom case). I just used a bit of Kapton tape to work around it. (A "genuine replacement" drive would have the cable and foam already installed, so obviously these replacement drives are naked.)
Getting back to the drive itself, everything worked as expected. The drive was recognized by Disk Utility. It came initialized with a MBR map, and two partitions. I changed it to the proper GUID partition table and HFS+ (journaled) format. I already had a mirror of the original failing drive on an external, so the next step was to perform the Restore (block copy). No issues there, either. After completing the restore, I was able to boot on the new 120GB drive.
btw: the backup image (on the external drive) actually came from a Time Machine restore, from a wirelessly networked drive (through AEBS). It took a while, but worked perfectly. The failing drive apparently had some read issues, so I wasn't able to get a Restore image directly (which would have been MUCH faster).
It's going to be nice to have the extra room. I don't have any feel, yet, as to performance differences between the 80 & 120GB drives. The 120GB has a bit faster media access rate, but I'm not sure we'll notice. I'd recommend the upgrade, especially if you're looking at a failed 80GB...
. My only hesitation would be in recommending it to someone who isn't experienced working on notebooks - and even then, only if they've done more than a drive replacement. It's definitely NOT in the same category as any other Apple notebook. This is more like watch repair, to put it into perspective. If you're up to the task, just take it slow and track ALL screws - there are many different lengths used (3 different ones for the bottom, 3 for battery & 2 for drive).
Hope this info helps others considering the drive swap. So far, the drive has performed flawlessly.