Mac Specs: Dual Core 2.3GHz G5 OS X.5.8 8GB DDR2 RAM
Yes four drives, two on the right rear and two under the superdrive provided you have the sleds on which they mount. You will need cables for the two under the superdrive. The original hard drive cable has a second IDE connection for an additional drive.
Pop a 500GB HDD in the second position, making sure you have set the jumpers to slave. Format the drive Mac OS Extended (Journalled) and then use SuperDuper to clone the drive, which will be bootable, copy the 120 to the 500. Remove the 120, replace with the 500, setting the jumpers to master.
Later you can the additional drives as you see fit.