Since you're installing a drive but don't know what to do with it, I'm guessing you're a hardware person rather than a software person.
The safest option is probably to leave all your programs on C, and move your data to E. Use a tool such as Winbubble to tell Vista that your special folders ("my documents", etc.) are now on E. You can then back stuff up to your new drive.
If cash weren't an issue, I'd probably simply clone C to the new drive using something like Easeus, use the 1TB drive as the new C, and buy a second 1TB drive so you could continue to use the computer in the manner you're used to.