I ran into a bit of a problem with that on Suzily. For almost as long as I've had PCs, I've generally split the primary hard drive in half, with C:\ getting the OS, apps, and data, and D:\ getting games and their auxilliary files. On Suzily (and Swifty) that means the 120 GB ATA drive 0 was split into two 60 GB partitions. The problem with that was that my FS 2004 install plus its source files is about 45 GB. That didn't leave much room for much else. Now most of the other games are fairly small DOS era games, but the few more modern (and largish) games I have, like Civ IV and Sims 2, were in need of some elbow room. Add to that a music collection stored on the C:\ partition that is now at about 30 GB, and some rearrangement was necessary.
Suzily had two internal 120 GB drives, both split into two partitions, with the second drive storing video and comic book files and such like, and I also have two external 120 GB USB drives with similar stuff on them. There is also a lot of duplication. Swifty now has an internal 500 GB SATA drive in addition to all the other drives. (I need only to add another 20 GB of storage to hit 1 terabyte of storage total, whoot!)
So, all the music and media files were moved over to the SATA drive, where there is scads of space. This leaves plenty of room for apps and documents on C:\. I moved everything off the second internal drive over to the SATA, and converted it to a single partition (E:\) that will be FS 2004's (and eventually FSX's) new home. That should leave more than enough room on D:\ for any other games I may want to install for the foreseeable future. Elbow room!