Am I missing something simple here or is that just the way it is?
No, you are correct, RPA simply can not use any drive other than C. It is a huge pita. A patch could probably be made to make it use other drives but Bill's Symlinking suggestion is probably the easiest way to deal with it if you don't want to put stuff on the C drive.
Also, another trap, RPA can not see more than 82 folders and not more than 52 files in a folder so if your folder count where RPA is looking in is more than 82 every folder after the 82nd (alphabetically) will not be listed in RPA nor available to it. Same with the files.
- Tim