That's about the hard drive space. There are two things involved here:
1. The program files that the install puts on your system. Most install programs have an option to choose a folder. By default it's a subfolder of c:\program files, but you can chose another folder on another drive if you prefer. All you've got to do: uninstall and reinstall. But I'm not sure DNS does it. Easy to try, however. Note, before uninstalling, make a backup of all files belonging to it!
2. The files it creates after the install, like (I assume) your training vocubulary. I don't have DNS, but I assume it chooses a folder like c:\documents and settings\<your_usernam>\application data\DNS. It might have an option to assign another folder. Or, just as, it might not. Try the options, and read the help.
I can't help about the invalid vocabulary. Maybe get an old version from your backup?
I'm using Dragon Naturally Speaking, version 8, and haven't made any changes to it other than always saving "User Files". Most recently I CANNOT open my #1 User Name because a message reads, "Vocabulary you've chosen is incompatible or invalid". What the ???? Never had this problem before... How to fix it? ALSO-- Because DNS, version 8 takes up so much internal hard drive space (C Drive) can I remove it/ transfer it to a flash drive to plug in and unplug only when I want to use it? If so, How?