I tried the mount system volume last night on a desktop, just to see how it worked - it could be worse, but it could be better.

Essentially - you still see both the USB drive (mine was F:) and the folder (mine was C:\Program Files\SDHC) but … The entire drive is mounted to the folder. So you can’t have just a program files folder on the SD card and still store other items on it and not have your installations getting mixed up with it.

There are two possible solutions for me, as I see it:

The one semi-recommended on here is to continue installing new programs to the SD card (D:\Program Files), and move additional files to other directories on the SD card (i386, Temp, etc), to free up additional space so the Anti-Virus can install to C:. This is the easiest solution as it requires no changes from the current configuration.
The second option might or might not work. There was another website that mentioned using a program called Junction by Sysinternals to get Windows Update Files to install to the D:\ drive. Essentially, you create a folder on the D:\ drive called D:\Windows\SoftwareDistribution\Download and then you create a link (junction) from C:\Windows\SoftwareDistribution\Download to D:\Windows\SoftwareDistribution\Download. I think this could work if you set a junction between C:\Program Files and D:\Program Files - you could have the system install programs to C:, but they would end up on D:\ instead. (I realize to make this work, I would have to uninstall and re-install all the existing third-party software.)

As I said - the first option is much easier to implement and preferred on the forum here.