Why does my computer, which has Windows 7 Professional installed, slow down when the free space on logical disk C is less than 1 GB?
Because there there is probably a lot of fragmented data, which makes read/write operations take longer. In addition, if part of your page file is stored on your hard drive, it will also be take longer to read and write to that, and that could have a drastic effect on your performance.
Having less than about 10% free space on your primary hard disk will cause some performance issues like you describe here. Fragmentation is an issue, as the other folks here have noted, but another issue is what Windows calls "Virtual Memory."
With Virtual Memory, Windows will automatically use some of the free space on your hard disk as a memory "swap" area. This allows Windows to move some of the contents of RAM onto the disk. Typically, Windows moves less active programs and files out of RAM when needed to make more room for programs that you're actively using.
When there isn't sufficient free space on the disk, Windows will need to access the disk more frequently, and that will slow the computer down.
If possible, you should make more room on the C: drive (the drive that Windows is installed on). Increasing the size of the C: logical volume is a good idea, and so is removing any files that you don't need. Additionally, although this is not usually recommended, you can manually change the Virtual Memory settings by following these instructions.
Another option is increasing the available RAM in your system, if possible (but this costs money and may not be possible depending upon your hardware).
Best of luck.
I agree 100% that fragmentation is the root cause. There is simply not enough space, and it takes the drive more time to work if it has to go find open areas all over you disk to find a spot here, or a place there, to put data for it to use, and then to retrieve that data again later.
I will give you the same advice I just gave to someone else:
Then defrag your disk.