i'm using 80gb for my OS drive & programs. its about half full but i only install programs and games that i use currently. if you have an excessive amount that you want installed then yes, using the larger drive is better.
as for partitions: if you just want to store data on a different partition then go for it. i never had a single problem with doing this. however, using your program wouldnt it be just as easy for you to create artificial mycomputer items linking to subfolders? the only things i've read to watch out for is installing programs cross partition or cross drive. however, in the past i've done this without issue (until it came time to reinstall xp).