Yes I'm purposely over emphasizing this.
Yes you can use E:\ until you upgrade.
No it's not a GREAT idea though.
It's only a 4 gig partition (only hah!).
It's where all your save games, music rips, etc. go.
If you fill it many games will not run.
Some games may even be confused by running from the same drive they are saving games too (but this may be marginal...)
It's also all to easy to delete the UDATA & TDATA folders while screwing around with programs like boXplorer.
So I'd "strongly urge" people to upgrade the hard drive instead of using E:\
And in ALL cases, only use E:\ if you've backed up the entire drive FIRST!
Preferably to a CD or other permanent media for safety.