Redirect folder on one HDD to a folder on another HDD

Junctions (also called symbolic links or reparse points) allows you to do that. You can use mklink in the command prompt (with /D for directory) to create them:

mklink /D C:\Source D:\Source

This will be transparent to applications - that is they will see it as a regular folder.

In Windows Vista/7, it is safe to delete C:\Source from Windows Explorer, or from the command prompt (del C:\Source) as it will only delete the link, without affecting the content of your target folder (D:\Source). However, in WinXP/2000 it would also delete the target content, so you should use rmdir, or the Sysinternal Junction utility in this case.