There are no performance issues, but there are times when not installing to PF (x86) is useful.
Because the PF(x86) folder is a system protected folder, one reason for not installing to the default
location is to avoid 'permissions' issues ( eg - having to do the 'Run as administrator' option
in Compatibility ) , particularly when modding games, but also because, on rare occasions, games will not install to PF 0x86) at all. One example is I found that Doom 3 would not install to the default
location a while back when experimenting because of a thread regarding difficulties installing
the game on these forums ( I stopped installing games to a separate partition for better orginisation
early on with XP )..
If the above reason is not enough to convince you to install games to a non-default location -
Using a Partition or HDD (not just another folder in C:\ )dedicated to games was very helpful not having to reinstall well over 100 games (mostly non-steam) when I imaged my Win7 to a new 120GB SSD.
Check the Steam faqs section and post on the Steam forums as well to verify, but -
Steam is pretty flexible. I have changed drive letters over time when moving Steam to new
new HDD's (or machines), but you should do some homework on the topic first.
I started out with Steam on D:\ Partition, a few years back (05) when I first got Steam via Half Life 2,
but it's on G:\ these days.
If I remember correctly, it's just a matter of running the Steam.exe from the Steam folder
(your old shortcut will have an incorrect file path) while online, and Steam will do an update.
Steam may also want to verify your account, etc. after the update. You would also need to make new desktop shortcuts if you use them.
I did have to reinstall the Steam Client after moving Steam to a new machine on one occasion a couple of years ago. As with the GFWL client it can be downloaded and installed separate from games.
It's also a good idea to back up your entire Steam \ Steam Apps \ Common folder (where all your
non Valve games get installed), and your Steam\Steam Apps\ User name folder (where all the Valve games get installed) occasionally so you can avoid the pain of downloading and updating all your games again in future should a HDD fail.
.