By default steam install dir located in ~/
It would be nice if the first run of Steam would have dialog box that allows you to choose Steam install dir.
This is necessary in the case of small size of /home partition.
Possible solution - dialog box create symbolic link ~/Steam -> /path/to/your/dir
In case of small /home partition there is Steam Library feature, but it's still not fully implemented on Linux: #111 (we can create Steam Libraries but we can't choice it while game installation).
Similar like this one: #218
This will be resolved by the fix for #111 in the next update.
Sam, #111 is still reproducible for TF2 installation even with today Steam update.