I found this in a few different places around the 'net - hopefully it's helpful:
Turn Off System Restore to Save Space
By default, Windows XP keeps a backup of system files in the System Volume Information folder. This can eat up valuable space on your hard drive. If you don't want Windows to back up your system files:
- Open the Control Panel.
- Double-click on System.
- Click the System Restore tab.
- Check "Turn off System Restore on all drives".
- Hit Apply.
- You may now delete the System Volume Information folder.
Warning! If you turn this off you will not be able to use Windows System Restore to restore your system in case of failure.