As far as I can tell, yes, it will only install on the D drive, and affect only the 30gb you allocated to it. Likewise, when uninstalled, I think that it should remove the virtual disk that Wubi installs to.
If you ever want to increase the amount of space allocated to Wubi (taken from this post):
How do I resize the virtual disks?
You can use the
following script to move /home to a
dedicated virtual disk.
Download wubi-add-virtual-disk, open a
terminal and run:
sudo sh wubi-add-virtual-disk /home 15000
Where the first argument is the
directory to move to a new dedicated
disk, and the second argument is the
size in MB.
You should now reboot. If you are
happy with the result, you can now
remove /home.backup. To undo the
changes remove /home, copy rename
/home.backup to /home and remove the
/home line in /etc/fstab.
Note that contrary to previous
information, this script is not
suitable for moving /usr - experienced
users may be able to do this manually,
at own risk, following a process
similar to that outlined in the file.
(Do not rename /usr until the very
last moment, as rsync is installed
I haven't ever used Wubi, I've just done some reading up on it, so take my answer with a grain of salt.