Lou wants to re-partition his hard drive so he doesn't have his data sharing the same drive as his OS and programs. Leo says that with modern operating systems, it's not really necessary anymore. But it is good drive "hygiene," and he won't run the risk of wiping out his data when updating or reinstalling Windows. It's also easier to back up his data that way.
How big should the C drive be? Leo says it's a good idea to look at his hard drive for his Windows and programs folders. Add up the sum of those and he'll get a basic idea how much room the OS and programs take up. Leo says to make the the C drive is about a quarter of the total, and the data gets the rest for the D drive. Since Lou has a TB of space, that gives Windows and programs 256 GB of space to run wild.