The only benefit from having software programs on a separate drive to Windows is one of size as most programs make registry entries so would have to be reinstalled following a format/reinstall of Windows anyway.
My personal approach is to use partitions so as to organise my 2 80gb HDD's. On HDD1,I've 3 OS's partitions,Temp partition,Download partition,Music conversion partition,Personal Docs partition, and MP3Albums partition.
On HDD2,3 OS's partitions,Backup of Personal Docs,MP3 singles,Movies,Graphics,copies of installed programs, and partition for Drive Images.
Probably a bit extreme but it suits me.