First off, I'm somewhat new to things vm. I've used vmware and virtualbox for years, and occasionally used vsphere.
We have vSphere 4.1. I have a vm with 120GB of drive space. I need to add 50GB more. I've read that if it is in a snapshot, that it won't allow space increase. Is it possible and will it work if I set it back to pre-snapshot settings, increased space, and went back to the snapshot I was using?
you can't have any active snapshots on the disk if you want to increase it. So, reverting won't do anything. All snapshots must be removed prior to increasing the VMs disk space.
As Troy stated, you cannot increase space of a VM that has active snapshots. All snapshots must be deleted. However you could clone the machine in the desired state, rename the old one, change IP, ect, then increase the space of the clone and make it the new master. Please note that this may affect applications/licensing that looks at hardware ID's or other services. I've done this many times in the past to migrate RDM's over to VMDKs and it works well.
Hope that helps!