Heh... my organization is so unorganized, half the time I have no idea where a given game/program is installed.
Originally, the idea was to put games in D:\games, so I have 88 folders there with different games/source ports/etc. but at the same time I have most "newer" games in the appropriate C:\Program Files folder, since they have both 64 bit and 32-bit editions and I have no idea how they would work if installed elsewhere. This in addition to the fact that Most of my C: was empty at the time.
As for reinstallation, though, I back up absolutely nothing but a few of my programming project folders. I've lost years worth of work that I have yet to "recover" and let me tell you, the inconvenience of having to reinstall a few programs pales in comparison to the prospect of rewriting an entire application.
Also, I have a sort of "redundancy" for older files, since they are also present on the drives from my older computers, in the exact same setup (since I just cloned their contents to whatever my new drive was).
He reckons that this section of the harddrive is always checking for viruses and malware and that this can give you a performance hit on games by slowing them down and things. He talks like he knows a bit, but is he right? I don't want to argue about something I know nothing about.
See, here is the difference between you and you're friend; you state outright that you know nothing about the subject; whereas they don't either but pretend they do. He is just making stuff up.