Don't try to delete this folder, even an admin does not have access (by default) to this folder for a reason. It contains indexing information, backup snapshots, and probably loads of other stuff.
Do you have system restore activated ? as this info is stored there and probably one of the reasons it is so big. If you do want to delete some old system restore points you can from here but the best thing would be to use the system restore cleanup option (which will delete all but the last) from system tools > disk cleanup
Oh found
this which has loads more info
If it ain't broke
**EDIT**
Sorry you also said you can't install an application cos you're out of space, if you can't install it on another partition/ drive you can safely remove all your .tmp files (do a search) also all the files in these folders - History, Temp and Temporary Internet Files from c:\Documents and settings\USER\local settings.
Where USER is you or in fact if you have more than one user and your an admin delete them from all the users folders.
I assume you've also uninstalled any unwanted programmes (and windows components)
You can also do a disk cleanup (see above) this will also free up space
