Last time I checked Steam didn't ask where to install it. In fact, I was using a partition setup where C: was only for the system, and D: was for all programs, and not only did Steam not ask where to install it, but also disregarded all the environment variables and registry edits I did to point the default installation folder to the D: partition and installed it straight into C:.
I've never come across this, and also, moving the Steam directory has no noticeable side-effects that I've ever observed. eg. Just drag it to a new location and run Steam.exe, last time I needed to move it to a new partition I did that and it just updated the registry for me automatically. Wouldn't recommend all the same this but I never observed any anomalies having done so.
About junction points - never heard of them, although they sound like symlinks from Linux.
NTFS has supported this for as long as I can remember and they're kind of like symlinks but not as "hard" as a unix hard symlink and not as "soft" as as a soft symlink. Microsoft refers to them as "reparse points" or "junction points" although until NT6 the tool to create them by hand was not shipped with windows. Mounting a volume into a folder rather than to a new root letter uses this functionality however and has been available in MMC since NT5.
I admit this is more a sysadmin thing (or for that matter anyone who regularly uses Linux or Unix) but since the
mklink now ships with the OS it makes it far more accessible to ordinary users. People seem more au fait with reparse points also since NT6 uses them in user profile directories as standard (for example "My Documents" actually reparses to "Documents" and this is listed as [JUNCTION] when you look at a directory listing).
Does UnrealEd even acknowledge them?
Of course, think of it like a hard link. Unless an application explicitly chooses to differentiate between directories and junctions it has no way of telling the difference.
Also, from what I know, symlink support is in Vista/7 out of the box.
I think I already covered this, although I guess most people think of Vista and 7, I was trying to cover both by using the term NT6.