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http://support.microsoft.com/kb/301224:

If you start the Disk Cleanup utility and you click the Disk Cleanup tab, a System Restore: Obsolete Data Stores entry is available. These are files that were created before Windows was reformatted or reinstalled. They are obsolete and you can delete them.

If you choose to clean up and delete these files, you will no longer see them under the folders that are mentioned earlier in this article, and the option to delete obsolete data stores will no longer appear on the Disk Cleanup utility.

I was wondering about the sentence "These are files that were created before Windows was reformatted or reinstalled". Does it mean when the hard disk is brand new, System Restore: Obsolete data Stores would not be available, and from that time onwards, even if we do a complete reformat, System Restore: Obsolete data Stores would still be there?

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No, they would not be there. Re-format of a disk erases all information on it. These "obsolete data stores" appear only if you do in-place Windows upgrade, and there are some restore points from a previous version of Windows. Obviously, you cannot restore to them.

So this appears to be a bug in Microsoft documentation. Interestingly, I read a Russian translation of the same article, and it simply says (translating back to English from Russian) "before Windows re-install", no mention of re-formatting.

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What do you mean an in-place Windows upgrade ? do you mean updating my windows? – Pacerier Oct 16 '11 at 14:00
No, I mean sticking, say, Vista DVD into Windows XP machine and doing an upgrade from Windows XP to Windows Vista. Not just using Windows Update. – haimg Oct 16 '11 at 14:04
ic. just a check, does your computer happen to have System Restore: Obsolete data Stores listed as one of the entries under cleanmgr.exe ? – Pacerier Oct 16 '11 at 14:38
@Pacerier: No, I don't have it. – haimg Oct 16 '11 at 14:52
ok thanks =D Btw, so is it true to say that the difference between in-place upgrade and non-in-place upgrade is this folder? (which after deleting, means there's no difference at all between an in-place upgrade and non-in-place upgrade) ? – Pacerier Oct 16 '11 at 14:54
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