Wayne Jarvis, while creating a separate data partition, wonders if a third, program partition is a good idea.
A lot of people think so. Indeed, some people go wild, with separate partitions for documents, photos, music, and programs.
But I don't see the point. Separate system and data partitions allow you to restore Windows to an earlier reincarnation without affecting your data. (The only reliable way to backup and restore Windows--at least that I know of--is an image backup of the entire drive or partition.)
But because of the way that programs insert themselves into Windows when you install them, that doesn't really work with a programs partition. You can't restore an old backup of Windows and leave your applications alone, because Windows won't know about any programs you've installed since the backup. Whether you put programs on another partition or not, you'll still have to reinstall some of your programs.
Breaking up a hard drive into multiple partitions has its problems, especially if the disk is nearly full. The more partitions you break it into, the more likely that the one that needs more free space won't be the one that has it.