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But as for using other folders, you can use what the hell you like, including other drives. There's no reason to mess around like in the old days either. The facility is right in the steam menus now - you just go into settings, then downloads and add another drive and directory (mor more than one). You can then move your stuff there, by choosing the option within steam as well.
I personally have about half my games installed at present (400 or so). My C: drive I've kept free for other purposes, likewise with the D: partition. I have an SSD (G:) for windows, and a USB drive partitioned into two (F and H:).
Steam games are predominantly on the F and H drives at present, and a couple I've even moved across to the SSD (G:) as well (like 7 days to die as that can be a pain starting a new game, taking about 20 minutes to start). The actual Steam installation resides on C:.