It is a common custom among Orthodox Jews to express hope that someone lives to 120 years. Personally, I've always found this to be a bit odd. Why only 120? Of course, a person living to 120 nowadays is exceedingly rare (only two examples, [one disputed] in the last hundred years) and anyone living to that age certainly has God's blessings. Personally, I plan on being around around beyond 120, but if I only make it to 120, I certainly won't complain.
In any event, I've always wondered why we only wish for a person to live to 120. Of course, the first thing that pops into mind is the fact that Moses lived to 120 years and it may seem presumptuous of us to want to live longer than Moses. Personally, I find that argument a bit week. After all, Shmuel HaNavi only lived into his 50s. Do we think that we are greater than Shmuel HaNavi? Of course not -- but just about everybody wants to live past their 50s! Personally, I just about never use the phrase Ad Me'ah V'Esrim. If I want to express a hope that someone will live a long life, I usually say so... they should have Arichas Yomim, be in good health, etc.
I remember having a discussion with someone about longevity when I brought up the case of Jeanne Calment, who died in France in 1997 at the age of 122 years. When I mentioned it, he flat out refused to believe that it was possible for her to have lived that long. He stated that it was impossible for a person to live beyond 120, as that was the age that Moses died at and, apparently, there is [according to him] some tradition that states that one cannot live longer than that. When I pressed him for the source of this "tradition," he couldn't come up with anything.
I then went over to the Tanach and advised him to check out the second-to-last verse of Iyov (Job) where it states that Iyov lived 140 years *after* all the event that occured in the book. His response to me was that (a) Iyov never happened (a legitimate position to take) and (b) Iyov is traditionally ascribed to Moses, hence, if factual, the events occured before Moses when people did live beyond 120 years.
I then took out a copy of Divrei HaYamim (Chronicles) and opened it up to Part II, 24:15 where it states that Yehoyada the Kohen lived to the age of 130. He similarly wasn't impressed by that (I think he muttered something about exceptional circumstances and whatnot).
In short, I'm certain that the idea that a person can't live beyond 120 years is hogwash. Jeanne Calment's life is pretty well documented, plus there are at least two biblical sources for someone living beyond 120 (there are opinions that Iyov happened after Moses, if it happened at all).
Besides, would you say Ad Me'ah V'Esrim to someone who is already 119 1/2?