As the size of hardrives increase, more people are using partitions to seperate and store groups of files.
XP uses the C:\Program Files directory as the default base directory into which new programs are installed. However, you can change the default installation drive and/ or directory by using a Registry hack.
Look for the value named ProgramFilesDir. by default,this value will be C:\Program Files. Edit the value to any valid drive or folder and XP will use that new location as the default installation directory for new programs.