parallaxtz

It is possible to move both Users (the new name of Settings & Documents) as well as ProgramData (writable location for programs to use -- they're not allowed to use ProgramFiles post install for data). You can do this manually after you have installed Windows via a few registry hacks, but it is somewhat of a pain to get the files transfered properly. Doing it after windows setup will leave crud files in the original location. Preferably, it is possible to make a special setup of windows (either a custom disc or just an autounattend.xml) that will automatically place your Users and ProgramData folders on another harddrive or partition. There are instructions in the Unattended Windows 7 forum here concerning this. It's a little confusing at first, but ultimately is very powerful -- you can create very customized windows setup discs that can also install other useful things (firefox, chrome, office, etc) all off the one disc. It can become sort of like a recovery disc from a PC manufacturer.

You need to make the new .iso bootable at the very least...although I've not gotten it quite working yet either. I think something with building a custom WinPE boot image? The Microsoft instructions are very long and a little confusing for a first time user (like me), but that /seems/ to be something that needs to be done when making a custom iso.