1.) Download and run the free program CCleaner, which will track down and delete most of the junk and temp files on your computer taking up space. This will likely free up a couple hundred megs.

2.) Download and run the free program TreeSize to find out which directories are taking up the most amount of space on your hard drive. That will help you identify the trouble spots.

3.) Go Start->Control Panel->Add/Remove Programs to uninstall any unnecessary software.

4.) Delete any old files that you no longer need. Just find them then select and press Delete or right-click and select Delete. Be sure to empty the Recycle Bin (right-click->Empty) when you're done.

If the hard drive is too small for your needs you can buy another one...they're fairly cheap and easy to install. (160GB can cost you less than $50 if you shop around.)

Hope this helps,