Test Everything Thoroughly
One caveat: if you perform a repair/reinstall of XP after having moved these folders, the repair/reinstall will rebuild another C:\Documents and Settings folder and C:\Program Files folder on the system drive.
The repair/reinstall will not alter the settings for the relocated folders that you already have in place. You'll have to go through the registry editing process again but without moving any of the "rebuilt" folders--they are basically empty, and you don't need any of their content.
The procedures after a repair/reinstall go very quickly--there are very few registry values to change.
Once you have completed and tested the registry editing, you can delete the folders that were rebuilt by the repair/reinstall.
You might say some programs won't work, and you may be right, but I have yet to find any that won't. All mine do, including Office Premium 2000 and Adobe Photoshop. All my son's games work. All updates for my apps work, my AV and Anti-Spyware apps update automatically to G:\Program Files without incident. All Windows updates work, as well, even though IE7 is located in G:\Program Files.
As you use your installed applications, check the options/preferences dialogue boxes to make sure that your apps' product files are stored in your new Documents and Settings location. All Windows applets will default to the new location, and all programs that use the Windows API's will also default to the new location. Any new installations will automatically default to the new Program Files location, except for those that still have archaic installation routines that are hard coded for "C:\Program Files". You can move them (following the steps listed above) after installation, and they will work just fine.
I use BootIt NG drive images for backup, and they work flawlessly. Yes, I do indeed trash my system from time to time and do a restore, just to make sure that my backups work.