The strategic question is "How do I maximize free space on the System drive," and includes such things as disk compression, changing the TEMP environment variable, removing the hibernation file, minimizing the swap file, buying a larger drive, etc. This is the tactical question about what files can be removed safely, and whether to remove them with a file system command or by changing a retention-setting somewhere.
For example, C:/WINDOWS/Installer on of my machines is 1.5G, and the newest files in there are fifty days old. Total free space on that C: drive is 3G. Is the proper approach to burn them to optical disk just-in-case, then delete them from the command line, or is there some Registry setting that will let Win2k3 do something more sophisticated? Or is that 1.5G of precious, precious treasure?
Edit: The issue is particularly acute for virtual machines, where there will be system snapshots in multiple configurations. An 8G disk is (initially) amply sufficient to run Win2K3, Visual Studio, SQL Server, and the application being developed, but over time cruft from old patches consumes enough resources to prevent new patches from being applied.