From MSDN:
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Windows Home Server will use 20 GB of space on your system drive for the system (C: ) partition, and the remainder as the primary data (D: ) partition, which is the starting point for the storage pool. Other drives will be used as secondary drives In the storage pool (minus 20 GB per drive, which is reserved for file growth, etc.). You can’t control the way WHS uses it’s drives, so you can’t split the OS onto a separate drive.
Using a small (80 GB) drive as your system drive will hamper WHS operations in a number of ways. The system drive is used as a “landing zone” for files being copied to the server; as a result an 80 GB system drive (74 real GB) will limit you to a maximum copy size of 54 GB before you’ll have to wait for Drive Extender to move files off the drive. the system drive is used for other things as well. “Tombstones” are stored there, as are duplicate files and backups in some cases.
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Now I have seen some threads that said a service pack had changed this but another good point I saw was that unless you have a lot of room for expansion that you should use the largest drive in order to save yoruself from dealing with running out of space as your grow your pool.
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