Over the years I have vacillated between having my project/source folders in a directory one level removed from the root (e.g. D:\Projects) and keeping them in the default location for Visual Studio.
In the past, I resisted storing anything in the various "My Documents" folders established by Win 95, Win 98, and XP. I finally switched to storing them in the Documents folder since Vista shortened the path and I got tired of changing default directories for my dev tools. However, now I find myself leaning toward creating a folder off root again since I am setting up a new machine.
I get tired of the long paths you have to navigate to when stuff is stored in the documents folders. Also, I don't backup source code and database files like I do with my other documents since I use a VCS for source code. However, it seems you are always fighting to maintain a "non-standard" source location since every dev tool generally wants to store stuff in a subfolder of documents.
I would like to hear other's opinions on this subject.