The "Local Settings\Temp" folder is a directory where temporary files are stored during program installations and uninstallations.. It also contains files that may have been unzipped, downloaded, or placed there by you. A few "working" programs will store folders and files there during their normal operations.. Those particular directories and files won't be deleted in "normal" Windows because they're being used by the program. Everything else should be deletable.
Since you have so many files there, first search for all the files with .tmp file extensions and delete them all. Then empty the Recycle Bin.. Next, although there should be no problems, start deleting the files and folders in small increments, say 20 or 30 at a time.. After each set is deleted, restart the computer, run a few programs to make sure there are no problems, then empty the Recycle Bin again.. Repeat the process till everything is gone.
Hope this helps.