|Raid shcmaid. You are already on the right track. Keep it simple (and the whole 320GB available).|
First, move the "My Documents" to the non-OS drive (right-click My Documents/Properties, and follow the prompts...).
Most programs you can install on the "data" drive (not copy or move, but actually install). Some programs, though, are still better "suited" to install to the default boot OS drive... but only a few. I think you will soon figure that one out. But it is not really a speed-related factor.
With two drives, you don't actually need to partition either one, but sure,... you don't need all of 160GB for the OS. I would suggest, though, that 20GB is needlessly too conservative a target for the OS partition, in light of your specs, because the pagefile, if defaulted to "Let Windows figure it out" (recommended) will be looking at size (size matters).
Rule #1: Keep.It.Simple.
PS: you may not be able to perceive an appreciable speed difference, no matter which configuration you decide on... not for long, anyway. Speed is contingent on many factors, hard drive size is hardly the most notable one.