Craig,
I always copy my Runtime files into the directory that the application is installed into for several reasons.
1. I use REFOX and so they are encrypted anyway and won't run with other VFP apps on the same machine if they are in the SYSTEM folder.
2. I have had installations that had two different apps from me on the same machine and were using different versions of the Runtime files because one had been written earlier and not been recompiled on the same machine.
3. Since my apps are downloadable from my web site, I want to make sure that other apps don't clobber my run times so I again place them in the directory of the application.
A few years ago I had lots of problems with other apps clobbering my run times and then making my apps unusable. I hope that helps with some of my reasons. I know they eat up disk space. But disk space is cheap now and it's safer.