The separate data partition is a holdover from Win98/2k days, actually; I got into the habit of having it that way because Win98 in particular was unstable enough that I had to reinstall the entire thing from scratch on several occasions. Win2k was better, but when it broke, it broke hard, and there were at least two occasions that I remember being VERY grateful for the separate data partition when the OS needed reinstalling and insisted that it was NOT going to be reinstalled without formatting the data partition.

XP seems to be safer... but I'm paranoid, and I'm still a shade more comfortable having my data and my OS in separate locations.