The main reason for putting the O/S and programs on one drive and all your data (including video) onto other drives is that it makes backup and recovery MUCH easier. On all my computers (I have close to a dozen) I use a partitioning program to create two logical partitions on one physical drive. I put Windows and my programs on the C: drive, and partition that drive to have about 10 GB. I then allocate all the remaining space to the D: drive (or whatever letter is available).

I run a very tight ship and configure all my programs so that their temporary files go on the D: drive. This lets me keep the C: drive really small. When I need to backup, I use an image backup program, which is the only way you can backup and restore Windows. Since the C: drive is comparatively small, I can backup to an external hard drive in under five minutes. More important, if something gets badly trashed by a bad installation, operator error -- which is usually what happens in my case ;) -- virus, adware, or whatever, I can restore the C: drive partition in less than ten minutes.

IMHO, there is absolutely no reason why every computer should not be configured this way, and failure to do so makes the whole backup and restore proposition virtually useless for most people. Why? Because you cannot restore a Windows computer unless you do an image backup, and because image backup is an all or nothing proposition, you are faced with the task of backing up -- and later restoring -- up to 2 terabytes of information, when the only thing that really needs to be fixed is stored in an area that is two orders of magnitude smaller. Thus, by failing to partition in this manner, you take a ten minute task and turn it into 10 x 150 = 1,500 minutes which is pretty close to 24 hours.

The second reason that separate drives and partitions is often discussed in this forum is performance. When this is the object of the discussion, partitioning is useless: you have to put things on separate physical drives.

The basic reason why you can improve performance when you put video on separate physical drives is that your hard drive cannot read and write simultaneously, and cannot read from two or more files at the same time. If you do multi-camera work, if you have the files from multiple cameras on the same physical drive, your timeline performance will degrade if you have to display all these cameras at once on the timeline.

Also, when rendering, if the output of your rendering operation goes to the same disk drive as all your source files, you will increase the render time because your drive cannot read from the source files at the same moment in time as it is writing. Under some circumstances this difference in render times can be quite significant; in other cases it hardly matters.

One thing to note: if you have just one camera, and you put the video on the same drive as your O/S, you probably won't see much, if any, timeline performance improvement by moving that video to a separate physical drive. Why? Because your computer usually does not do much reading or writing of program or O/S files once the O/S is loaded (i.e., after you have booted) and once you have started your editing program. The big improvements are when you are doing a really fast render, where Vegas is spitting out the results almost as fast as it can read the input file and, as already mentioned, when doing multi-cam editing.

So, use partitioning to make it simple to backup and restore; use separate drives for each source video file and for the final render in order to improve performance.