function DoesDriveExist(DriveLetter: char): string;
var 
    i: integer;
begin
    if DriveLetter in ['A'..'Z'] then {Make it lower case.}
	DriveLetter := chr(ord(DriveLetter) or $20); 
    i := GetDriveType(ord(DriveLetter) - ord('a'));
    case i of
	DRIVE_REMOVABLE: result := 'floppy';
	DRIVE_FIXED: result := 'hard disk';
	DRIVE_REMOTE: result := 'network drive';
	else result := 'does not exist';
    end;
end;

function DoesDriveExist(DriveLetter: char): boolean;
var
    drives: TDriveComboBox;
    i: integer;
begin
    result := false;
    drives := TDriveComboBox.create(application);
    drives.parent := form1;
    form1.listbox1.items := drives.items;
    for i := drives.items.count - 1 downto 0 do
                             {Note: this is case sensitive: lower case.}
	if drives.items.strings[i][1] = DriveLetter then result := true;
    drives.free; {...so that the combobox doesn't show.}
end;

Also, DiskFree() will return -1 if the drive does not exist.

function DirExists(const S : String): Boolean;
var
    OldMode : Word;
    OldDir : String;
begin
    Result := True;
    GetDir(0, OldDir); {save old dir for return}
    OldMode := SetErrorMode(SEM_FAILCRITICALERRORS); {if drive empty, except}
    try 
 	try
	    ChDir(S);
    	except
	    on EInOutError DO Result := False;
    	end;
    finally
	ChDir(OldDir); {return to old dir}
	SetErrorMode(OldMode); {restore old error mode}
    end;
end;