Well, I'll be completely honest with you. If you don't have available space for SQL Server 2005 (some 350 MBs) on your system drive, then you should consider do something with your system drive instead of installing SQL Server 2005.
Apart from that, I think you can specify the installation directory during setup, but I'm not completely sure. I know however that you can install from the command line.
AFAIK, Temp space is needed on your system drive for installation of SQL Server. You can install the SQL Server on a drive other than your system drive, but you will still need some sapce on your c drive for the installation to unpack the files and install it on your desired drive.