1. It isn't such a good idea to delete the xbox dash. It wouldn't harm much, but your xbox will not work with the chip off, otherwise it is fine...unless you have a really old set of bios.
2. Make a "E:/Dashboards/" folder. Then in subfolders of that directory, put your alternatic dashboards. Next, open the avalaunch.xml, scroll down to the bottem, and add this somewhere in the <menu> tag, above </menu>. It should show up as a new option called "dashboards".
Code:
<list presetname="Dashboards">
<path>
E:\dashboards
</path>
</list>
3. Keep the MS dash on C. In fact, don't put anything on C at all. You can have all your dashboards in the "dashboards" folder. Use xbtool. You have to reflash a new set of bios to your chip to do it, and it does not work with the x2_4983 bios set. Use x2_4981 (unless you have a v1.6).
Open a bios in xbtool. There will be 3 bootup dashboard options. If one dashboard isn't found, it goes to the next. Leave the last one xboxdash.xbe, change the second to whatever, and make the first say "avalaunch/default.xbe". Replace default.xbe with whatever the xbe name is, like avalaunch.xbe. Then, change the drive to E. Save the bios the correct size, and reflash your chip. It will boot to avalaunch.