If a system has one 120GB SSD what is the most efficient use of it? I heard since most programs make calls to the operating system it increase the performance of everything if you install the OS on it.
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In my opinion, the OS would be the best thing to put on an SSD (Faster loading, Few Modifications to the files).
Too be honest most programs won't have to load much from the OS (with a few exceptions, directX in games for example).
You could install programs you want to load fast to your SSD, Hard drives are usually fast enough for your Data, and I wouldn't put my files (Or anything I edit often) on an SSD because as you rewrite/modify files on your SSD, it can effectivly "shrink" the remaining size (degradation).
In any case if you do end up installing your OS on the SSD, Be sure to disable hibernation and decrease the size of your page file, wouldn't want your disk space disapearing !