Disclaimer: I'm using Windows 7.
Personally, I wouldn't be touching any system folders. Some tips to free space:
- From My Computer, right-click the hard drive and select Properties and press Disk Cleanup. I recommend selecting all options except "Downloaded Program Files".
- In C:\ delete any folders that are just a string of hex-digits. These are old installers.
- In C:\ delete all files. Any files that were there were from old installers. Note: may not be the case in Windows XP.
- Clean out your documents and media files. Are you ever really going to open that file again? Move your media to a secondary or external drive.
Quite frankly, if you're that tight for disk space it's time to invest in a new drive.