I have moved the following Documents and Settings folders to a separate partition: Application data, Desktop, Favorites, Start Menu, Templates, User Data, My Documents
I don't see any ramifications with Desktop, Favorites, Start Menu and My Documents - however, I am unsure about Application data, Templates and User Data.
I will often restore a prior system partition image when my machine starts acting odd - and I don't have to worry about restoring the "data" (i.e. the folders I mentioned above). I have not experienced any problems with this approach. Can anyone see any issues with these folders being out of synch with the system partition: Application data, Templates and User Data