We would only lose what we don't backup.
As to your space loss I'd ignore it and use Disk Cleanup once in awhile.
I have a compaq desktop that runs on Windows XP & lately the disc space on my (c:) drive has been deteriorating rapidly I download quite a lot & delete older files when I need more space almost daily. What Should I do to stop this ( please detail EVERY step I'm not good with comps when it comes to the system based aspects). Also can I still run my comp with no disc space? Will my comp crash? Is it possible that I could lose all my files? Please Help.