During install of XP my HD was given the drive letter H: because the card reader was assigned C:, D:, E: and F:.

Now when I am trying to install drivers I am encountering a problem. Most of the drivers are Setup.exe type files and when I open them they automatically want to install to C:\Windows\Temp. Since my system is on H:, how do I change the default install directory on these Setup.exe files.

I changed the card reader to I: but it will not let me change the HD to C: since it has teh system files on it

Use environment variable setting. [control panel, system, advanced tab]. But some installers don't give any option to select where they write their temp files, don't use the environment variable - they just expect C: to be the system drive, and go there.

Change the C: unit in the card reader to another letter. Now, you can use the "subst" command to create a C: drive, to a folder of you system partition. I think this may help you.
Or you can disable usb ports to disable the card reader and reinstall your Operating system. The letter in the system partition can't be changed.