Hey Nickles, this is what I do for my storage needs. They'll be a little different since I have a couple of computers in my home and use remote desktop to work with them all.
First off, I have a "server" machine. It's just running Win7 though, not Windows Server. It's called a server cause it handles all the file, print, optical drive burning, virtualization, and internet sharing (large downloads, etc) stuff. It's the workhorse in the house.
I have 2 internal drives on it. The OS drive is 40 gigs (IDE) and houses Win7 and all applications including things like WinRAR, ImgBurn (which I recently tried out and really love!), Virtual Clone Drive, and a whole host of other stuff. It almost never gets fragmented and usually never more than half full. Since all the system stuff happens on this drive, I almost never see system slow down.
The second drive is 130 gigs (IDE). All the file fragmentation heavy stuff happens there. Large downloads (like P2P) and such are the only things directed to this drive. All RARing and such happens on this drive. This drive will get fragmented at 50% or more within a day (such is the nature of P2P downloads). Luckily since the only thing using it regularly is the P2P program, that rarely matters since it just looks for the next empty spot more than accessing existing files/data.
When P2P has finished downloading a file, it then gets moved to 1 of the 2 external drives I have - a 750 gig and a 1 terabyte drive. The 1 TB hosts just movie (LARGE) files of 700+ megabytes. The 750 hosts anything else I want to archive like small videos (300 to 500 megs), game patches (1 meg to 1 gig), personal documents, etc. I split the 2 externals up like this cause the 1 TB is full with about only 20 gigs free. The 750 only has about 100 gigs free at the moment too, though I've been on a DVD-burning archive stint for the past few days. It also only had about 20 gigs free a couple of days ago.
Now, remember, the above computer is the "server". I never actually sit at it and just remote in. So, with all these drives as full as they are and such, the PC also has to deal with providing remote desktop service to another PC, and yet it still runs like a champ. It may not be super fast, but it has almost never bothered me with how slow it is (and I'm a very impatient person). Its processor is only an Intel Celeron running at 1.4 ghz with only 1.5 gigs of ram. Its built in video card is so old, it won't do Windows Aero. This computer is OLD! It has 4 harddrives all at least 50% full. It's usually running at least 3 to 4 processor intensive applications at any given time.
Then there's my "main" workstation. It's a gaming rig. It has a 150 gig (SATA 1) Raptor drive and a 320 gig (SATA 1) storage drive. The Raptor has Windows and a few games on it. That's it. That's all that's allowed. I rarely hit more than 40 gigs installed total since I usually uninstall a game when I'm done with it and usually focus on one game at a time. (Wish I could find a nice 40 gig solid state drive.) The 320 drive ... died this week.

I moved a couple of weeks ago, and I guess something happened to it. Though it had been making a few odd noises previously. The optical drive in this computer isn't used that much either since I tend to install from the shared virtual optical drive on the server.
All of my drives are paritioned to take up the whole drive. As you can image, my "My Computer" is already full of drives, so I try not to create more of them by partitioning. I was never a fan of partitioning a drive. I always hated how one partition would fill up before the other, and the other one still had like 75% free. And in the days when I started using computer, repartitioning a drive meant you lost everything on the partition. Ah, the old days of fDisk. Now, with Win7 (and Vista) allowing dynamic paritioning in the OS, it is something to rethink I guess.
You also mentioned wanting more storage yourself. That 1 TB drive I have is on sale at Best Buy for $120 at the moment. It's the Western Digital MyBook. All my drives are Western Digital. I've had dozens of them, and the one that died this week was the first one I've ever had a problem with. I'm going to go dig out the receipt this weekend and call WD for a warranty replacement though.
