Install Postgres on a SAN volume?

We are using PostgreSQL 8.2.9 on Windows, and we are setting up some new
machines. We used to install PostgreSQL on C: and then we put the
tablespaces onto our SAN drive (Z:). When we tried to mount the
snapshots of the SAN we learned that they were useless since we only had
the tablespaces, not all the other stuff. So we are considering two
options:

1) We could install PostgreSQL directly onto the SAN volume. That puts
the data directory, the application files, tools, EXEs, DLLs, etc. on
the SAN volume
2) We could install PostgreSQL onto the C: drive and then configure the
data folder to be on the SAN volume (Z:)

I'm not the hardware guy, but our SAN is supposedly superly-duperly
fast, RAID with mirrors stripes and even plaid. The connection is dual
fiber channels, is hardened against nuclear strikes, and includes a
laser defense system. So I am assured it is fast. Option #1 is the
simplest, and offers us lots of advantages. But I can't help but wonder
if putting the actual application files and transaction logs on there is
smart. It is really nice because it supports instant snapshots so we
can, in theory, snapshot a volume and re-mount it elsewhere. But I am
looking for any down sides to doing it this way. Any suggestions from
Postgres veterans?

Thanks.