Second Hard Drive Questions

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I've always gone with a drive the size that I've expected of needing and now I want an independant drive for windows 7 and a second drive for storage.

Now I don't know how this would work as I've never personally had more than one drive.

Can I install steam on the second drive from the os and run it of my desktop with a shortcut to the location of the second drive and will I lose any perforance/speed from having windows running something like that from the second?
 
Okay cool, saying that then I may go for the SSD for the OS, Velicoraptor for games then my existing Barracuda for music and videos and stuff.

Saying that, when using I tunes I can't install the program somewhere and play the files off that can I? I have to have the files inside the itunes directory, correct?
 
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