Paul, I have nearly the same set up as you.
- C: Master Core (XP 'n' stuff)
- D: Games (games! duh!)
- E: Media Archives (muzak, videos, documents etc.)
- K: DVD+/-RW
- S: DVD-ROM
- Z: CD-ROM
Later to add an "X" CD-RW in though.

I've had all sorts of problems in the past, and being who I am, I always reverted to the nuclear option (kaboom) before all others. In most situations, just reinstalling XP on C worked for me. Naturally, whilst in the process, when XP asks you if you want to format, oblige. Only if you have some particularly nasty issues [cough]Battlefield 2![/cough] will you have to take more aggresive action. IN that case, I had to wipe out my RAID array, delete it, recreate it, reformat, repartition and reinstall...
everything! 
A long process, but somehow a fresh XP desktop always puts me in a "fresh start" mood.

Although I have no desire to visit it again.

Plus I haven't a clue how I'll back up 500GB of data.

Some programs will recreate their registry entries, however I've had mixed results with this, so it's not something to be counted on. I've always just backed up my savegames/game checkpoints in a nice spot, and reinstalled all my games.
PS: Happily chugging along on a happy PC... for the moment!