First World problems. Do I upgrade my 120gb (with 40gb free) to a 256 or replace my 1tb platter (700gv free) with a 500gb SSD.

Yes

The second one is used for storage only? If that's the case, then choose first option, since using SSD for storage would be risky.

@racsorauli some storage, dev and games. Primary is for os and apps only. I store nothing on there that need to be backed up in case of format or failure.

For me loosing the primary drive means nothing more than a few hours work.

120 to 500 ssd?

Keep the 1TB HDD, and replace the SSD with a 1TB SSD

@Wexalian way too expensive. The 512 sata costs only marginally more than a 256gb msata. I don't want to see what the 1tb costs. Besides, that's a complete overkill. I am already using so little of the 1tb that I can rip out both drives and still have free space on a 512