I've used this a few times to put games on exchangeable media. Installers don't like it if you pick an SD card as an install target, but they don't care if C:\Games\Whatever is actually an NTFS mount point that goes unpopulated as soon as I disconnect the memory card. This trick has the downside of confusing installers that try to check free space, though.

For permanently mounted drives, I'd pick symbolic links over mount points because this lets you do file system maintenance and such much easier on a per-drive level. You can still keep everything under C:\ and treat it like a weird / on Unix, but it you need to defragment your backup hard drive you won't need to beat the partition manager into submission to make the defragment button show up for your mounted path.