I have the same problem (I was down to 1% free space on the c drive,while having 95% on F and 65% on E). I also found if I deleted files from one location, they would sometimes disappear from the other, as well, and I would have to fish them out of the recycle bin. It was explained to me by Microsoft tech support(though I didn't really comprehend it)that the duplicate files in certain locations contained small things (little elves?)which enable the same files in the other location to 'work properly.' I realize this information probably isn't terribly helpful to you, but at least you know you're not the only one with the problem.
I eagerly await more knowledgeable explanations from those who understand such things.
Tried to defrag the computer last night and it reported there wasn't enough free drive space left to complete the task. Used 'Explore All Users' to see what was where and noticed that in addition to the C: drive I've also got an F: drive and it seems to contain some exact duplicates of all sorts of stuff, for example there is a 'Documents and Settings' folder in both drives and they seem identical. I got the 'Duplicate Finder v3.5" software and a search of 'C:/Documents and Settings' AND 'F:/Documents and Settings' found 7800 files duplicated (35GB). Why is this happening & how do I stop it?