Under both circumstances, your income is going to be $200,000. It will be self-employment income filed on Schedule C in the case of a sole proprietor whereas with the S/Corp at 60/40, $120K would be wages and $80K would be S-Corp earnings.
Your total self-employment / employment tax is going to go down with the S-Corp. Because you are above the SS limit for both employment and self-employment income, your initial tax savings on the S-Corp is going to be the Medicare portion of self-employment / employment taxes on the the $80K that is only subject to income taxes. $2,320 is your approximate savings with the S-Corp before the expenses of incorporation and paper work.
Getting more aggressive in terms of salary would increase your savings (ie, S-Corp, but with less salary and more corporate income not subject to social security and medicare taxes). Getting more aggressive will also not jive will with the tax law to the extent you do not pay yourself a reasonable salary.
If you are in a personal service business (lawyers, financial experts, health pros, etc.), then Congress is expected to take away your S-Corp self-employment / employment tax savings, likely for tax years beginning on or after 2012. Congress tried to do this for 2011 and may yet, but the legislation has been stalled in Congress.
There are additional considerations on whether or not to be an S-Corp (people write books), so JustAnswers is not the place for a specific recommendation as to your company, but rather general guidance only. I will be happy to keep clarifying things for you.
Thank you for your question.