Disk space

The file win386.swp is your swap file, or virtual memory.

It's size depends on how heavily you are using your system.

You can limit the file size from the virtual memory section of the performance tab in device manager.
I do not recommend limiting the size of virtual memory, as this can increase system crashes.

The best way to reduce the size of virtual memory, is to reduce the number of programs that are running in the background. Every icon in the system tray equals memory being used.
Also, use a simple color background instead of a pattern or a wallpaper will reduce system memory usage.

Other files to consider deleating are:
Sounds: do you really need the sound schemes? If not delete most all .wav files.
Is Plus! installed? Delete any themes that you don't use.
Look throught the wallpaper files, delete any that you don't use. (.bmp, .jpg)
Have you used thumbnail view in any folders? The thumbs file can get large. Delete it and the .ini file that is in the folder with thumbnail view enabled.
Look for duplicate and backup copies of files. Delete those that you don't need.

Beyond the above, start looking at programs to remove, or a larger hard drive.