Will chaging iTunes installation directory from C: also chage the iTunes registry and backup directories?

Hi,
I have a hard time updating my iPad 1st gen to the iOS 5. The problem is that I have insufficient disk space on my C drive. The whole partition is 30 GB , Windows 7 takes up 10GB, I have some necessary programs installed there also and as a result I am left with ~9gb free space. I used the "junction method" which makes the backups before every sync on my other drive which is 500 GB. When doing those routine backups there is no problem - the backups are stored exactly at the desired directory, but when I am prompted that before the iOS 5 upgrade I will have to backup the whole device ( 29GB backup size !)
I click yes , hoping the backup will be performed on the bigger drive, but it just won't do it. It probably sees the free space on the C: and decides it won't be enough. So I am left with a choice of either make a massive clean up on the iPad (ehich isn't an option right now) or format my whole drive, make the partition bigger and reinstall windows which is even less desired option. I am curious though if I change the install directory of iTunes to D for instance will it change the backup directory and well or it will continue to do it when Windows is located?
That is what I wish to ask. If anyone has a better idea, please, share!
P.S. Also if I uninstall iTunes and then install it on other partition will I lose the media alignment ?
Thank you!

I tried all of that, no luck.    Did I mention that iTunes is gone from my desktop? This is not the first time that has happened either.   I have deleted iTunes download and reloaded it. restarted computer, nothing.  In process of downloading installer yet again.  And will try yet again.   Thank you for the reply though.

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