It shouldn't make a difference where the "Skins" folder is located as long as it is named correctly ie. case sensitive. But I have a suspicion that if it isn't on the same drive as the main dash that may cause some issue.
In all the versions of UnleashX I've used when you go to System > UnleashX Info and click on the Skins Path: "Skins" you can put in the drive where that folder is located ie. C or E:\Skins.
However on saving then rebooting if you check back you'll likely find the Skins Path has reverted to "Skins\" ie. no drive designation. That, surely, suggests the skins path will locate the "Skins" folder wherever it is located. If you check the Config.xml however it will show the skin path drive location as what was previously set.
At least that is what happens on all my UnleashX dash using softmodded and chipped Xboxes.
It does seem to be set up to find that "Skins" folder wherever it is; those skins within the folder still appear in the main menu Skins list. However whether it causes any issues or not if you have to create that folder or it isn't already on the same drive as the main dash why put it anywhere else?
Don't be confused by any other skins folders you might have on either drive, I've a "skins" folder containing the skin for my particular Linux installer and on another Xbox a "skin" folder contain what I think is the alternate Evox dash skin. SID folders will also contain their own skin sub-folder.
