I am decidedly going to leave everything other than documents, music, videos, and downloads in C:\Users. I think that this is the best way to get around the permissions problem. As for the incapabilities of FAT32 (drive errors, file limit size, etc.) I'm going to use the open source driver
implementation of EXFAT that I have found on Google Code. It's hosted here exfat - Project Hosting on Google Code
If anyone else wishes to do this, they can compile the FUSE implementation from source for their system with the following code:
svn co http://exfat.googlecode.com/svn/trunk/ exfat-read-only
sudo scons install
Then edit the FSTAB to mount the "exfat-fuse" device at whichever mountpoint you like
Of course, you don't have to use scons if you don't like good stuff to happen automagically.