Maybe I'm missing something obvious here, but on my Win2k system I can mount any partition I want on any (NTFS) directory, just like you can mount filesystems on directories in Unix. So just make your C: drive NTFS, mount the other partitions, and forget about the C: if you want Unix-style paths.
When we reach compatibility in this area, this will be possible for ReactOS too. On the other hand, because of that same compatibility, we will have to support drive letters too. I really don't see why we would have to make a choice in this matter.
The choice in setup would configure how the partitions are mapped to drive letters / mounted at directories. This is really missing in MS Windows' setup procedure. You can only choose on which drive and directory you want to install the system files.
Regards,
Martin