It looks like it should do what you want.
Have a look at this link.
http://technet.microsoft.com/en-us/library/dd277864.aspx
Below is the series of suggestions for a similar problem by another SharePoint Admin.
The first comment is not so relevant to you but the other comments seem to explain how to move the data files to another drive.
It's worth looking into also
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Have you check all of the database files are in E drive? Since there are configuraton, index and content databases of WSS 3. Perhaps the content database is on C drive?
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You should be able to move the data file to another drive as long as it handles by SQL server since WSS only talk to SQL server, and then SQL Server retrieve data from databases
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I would agree with cobrachen -- I would also search for log files (specifically IIS and SharePoint ones) those puppies can take up alot of space if you do not have a process to clean them up. I know by default that IIS will put it's log files on the C: under the Windows folder.
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Liebrand is correct. By default the IIS logfiles and the SharePoint logfiles both reside on the c: drive.
In order to move the SharePoint logfiles, you need to go to:
Central Administration > Operations > Diagnostic Logging
and change the path of the log files from there.
In order to move the IIS log files, you need to go to the properties of the web site in IIS and on the web site tab go to properties under enable logging and enter a different path where it says log file directory.