Agreed with Niburu - If you do a clean install of XP, it will assign drive letters in order, so the paging drive ends up being "C" in this manner, which is normally OK with modern programs because the installers look for %systemroot% which is wherever drive your Windows folder resides on. Older programs typically just use a static 'C:\' as the base drive, so on installations you would have to respecify your drive letter and path.
Vista and Win 7 assign whichever partition you install Windows onto as the C:\ drive automatically during installation so u don't have that issue. If you're changing around drive letters, common practice is to have A/B open for floppies, and Hard Drives / Disc / removables next, followed by mapped network drives - though in the end you can play around with them how you like.
If you have a second HD you want to store your paging file on rather than the HD windows resides on, that can give you even more performance over a single HD, though the best performance is typically had using RAID with multiple HD's, but that may be more complex a setup than you want to try out.
Niburu is also right in that some programs will fail to install if they don't see a C:\ drive as a default installation choice. You can get around this by having, say, a USB thumb drive designated as C:\, but it's much less of a headache to have a permanent drive partition as C:\, pereferably the one containing your Windows folder.