Is it possible to restore disk image to a different size hard disk

recently I made a backup 120 GB disk image using dd:

dd if=/dev/sda of=backup.img

Now I have a new 320 GB hard disk and want to restore that backup image to that new disk. Will running

dd if=backup.img of=/dev/sdb

do what I want? Will I be able to use remaining 200 GB of new disk?

(/dev/sda - old 120 GB disk, /dev/sdb - new 320 GB disk, backup.img - image file of 120 GB disk)

Sure you can. It's not the best way, but you can do it. dd will not auto expand the partitions to fill up the extra disk space. You can use gparted to resize the partitions after you restore. I use gparted on an Ubuntu install/boot/live cd since I always have a disk with me anyway.

Yes, it will work. But ideally you'd be using partimage or something more intelligent (including perhaps gparted) to make the image/clone the disk anyway. Perhaps a Parted Magic live CD/USB?

See also Using DD for disk cloning if you can plug both disks in at once.