No it can be installed on a different partition, but the registry is in the C:\ drive (or where the OS is installed). So given that the registry entries will be on C:\ it it really of little point in installing it on D:\ or any other partition. This is even more the case with avast5 as some of the information, etc. is stored on the C:\documents and settings or c:\Programdata folders depending on your OS.
I used to install programs on a different partition but if there is a problem on C:\ and you have to reinstall the OS the programs being installed on a different partition won't work as there will be no associated registry entries. So there really is little point in doing this as it doesn't achieve anything.