Deleting Windows Update Files

Folders in the WINNT folder with names like $NtUninstallKB820291$ ?
Here is the deal. I would not delete them. If you had to uninstall a hotfix, the original system files that were replaced by the hotfix are in these folders. So, to delete the folder denies you the ability to remove a hotfix.
Instead, did you enable the built-in disk compression Win2K (and XP) has?
Right-click on C: drive in My Computer, choose Properties, then on the General tab, click the "compress drive to save disk space" checkbox. Click Apply.
A window comes up, giving you the choice to apply the disk compression on the C: drive root only, or on all subfolders/files. Choose this option, to compress all subfolders and files, then click OK.
Watch it fly! It will take a while. 30 minutes to a couple of hours, depending on how many files are there.
After a while, an error pops up saying a file cannot be compressed. Click the "Ignore All" button to not compress this file and any other files that can't be compressed, and the process will continue.
Files that are running (processes tab of Task Manager, plus some system files and the Registry), plus any files that are encrypted can't be compressed. But believe me, you will get probably a few hundred megs of drive space doing this.
hope this helps

i disagree with above.
i delete all of mine.

as a general rule, install the hotfix, and give it a week or so. if no ill effects are seen, and everything is running smoothly, you should be able to delete those files with no problems

i also agree with answer #2. If you run drive compression, you will be in a lot more trouble than just running out of disk space. Caching to a compressed drive takes a lot and I do mean A LOT of processor time. I have had no ill effects from deleting these files, in fact, simply looking on microsofts web-site will tell you what files are replaced should a problem arise after deleting them.