*THEN* I notice that XP has started doing Vista-like things, like copying all files that gets put into My Documents, into "Users" instead, and "Documents and Settings" is hidden
"c:\documents and settings" is actually no longer a folder, but a 'junction'. It redirects like to another folder, Kind of like a symbolic link in linux.
It's been supported by NTFS for a long time, it's just that Microsoft never gave you any tools to make them yourself. You can download sysinternals' 'junction' which allows you to make them, though. Very convinient.
run out of space on the C:\ drive? No problem, just make "program files" a junction to another drive...