Always do partition so much easier on your next reformat etc. noneed to keep programs/games on a different partition though.
folders.
unless you are very confident with what you are going I would not format...
eg install sage account on d:\, format c: and you just lost all your data that sage decided to put in c:\programdata....
My strict rule of never formattign a customers machine saved me that day..!
(other apps will sneak stuff onto c
