I've always been advised to keep project files off the system drive.
I have a tower with three additional internal drives, and an external Raid. One of the internals is dedicated to project files, one is dedicated to my autosaves, and the other is dedicated to various source files I like to have on hand. The Raid has all the media files. I'm also an organization freak, so this helps me quickly determine where to find specific files.
Having the autosaves on a separate drive from your project files helps protect you from drive failure.