Separate partitions makes it much easier, faster to defrag. And you will want to defrag often.
Separate partitions allow you to turn off system restore (XP) on the editing partition. Also turn off AV by drive letter( I know I know some people don’t believe in AV …)
Firewire drives have their place ( I love them ) but if you are capturing DV over the same port daisy chained, then you may get issues of dropped connections.
A big plus, easy to see what files are what, and manage them as Scott pointed out. Worst place to put files is in My Documents
Easier to share the drive over a LAN. So, partition away
My cruddy old Inspiron only has a 5400 rpm drive and it works like a charm. Not real time but…