C: is usually the boot drive and contains most programs. D: is usually used as data storage.
The drives can be two separate physical drives (both HDD's, or one SSD and one HDD), or one drive can be partitioned into two to make two drives on one physical drive.
There are several programs available to partition a single drive to make it into effectively two drives. One such partitioning utility is this.
On a hdd, C: is the normal Windows drive you use, drive D: is most often used for the Windows recovery data, and is only accessed through boot options (f5 or f8 usually) when something goes horribly wrong and Windows on C: will not load.