Am installing a second drive to handle video work only. Do I need to install the video editing software on the second drive or doesn't it matter?

I would recommend keeping the software on your main drive and leave your second drive for your productions / videos. That way while your main drive is shuffling around keeping things going your second drive is concentrating on one thing only. I believe that this is the general rule.

Definitely what JT says. Keep your second drive free and clear of everything - put your programs on the first drive. Just to clarify: the reason for using a second drive for capturing video is so that that's all the heads do - they're not distracted from time to time by loading new routines into memory, so you avoid the possibility of losing frames while the heads are doing something else.

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On the second drive I also keep about 1 gig of logos, jingles and dubbing music that I frequently use so that I don't have to look for it all the time, it's always there.