What happened to the B: drive in Windows and why does the hard drive default to C?

Because back in the day of floppy disks, there were either two physical floppy drives (A: and B:), or just one physical floppy drive (A:) with one emulated (B:) so you could copy from disk to disk by exchanging disks every few hundred KB.

"Can we change it ?

Sort of. Some RAM disk drivers and USB tools allow to assign the long lost drive letter B:."

"I've seen Softgrid (now called Microsoft Application Virtualization (App-V) version 4.5) installs which use the B drive as it's hidden drive... It uses the drive to store the applications to run.

Here is how to do that: http://social.technet.microsoft.com/Forums/en-US/appvbeta/thread/d9d46885-d136-4ace-9cd9-3b881322b86a

jeah subst isn't a good idea but if
you are on XP or older and need to
change the drive letter to B: then go
to
HKEY_LOCAL_MACHINE\SYSTEM\MountedDevices
and change \DosDevices\Q: to
\DosDevices\B:."

Disk Manager (part of Computer Manager) will allow you to assign 'B' to one of your drives.

"My Windows XP box at the office has no C drive either. There was a bug in the text-mode setup version I installed from that was triggered by having a Zip drive (think 100 MB floppy) installed when running setup, resulting in Windows XP installed on drive E.

I've found it entertaining (and even occasionally handy) to have no C drive. Quite a few application installers have shown ""quirks"" when faced with no drive C at all."