With Windows Vista, the WinSxS folder was able to be cleaned up via a third party tool (WinSxS Lite here – Vista only!). With the initial release of Windows 7, we lost that capability – but it has since returned with Service Pack 1.
The WinSxS folder is used to store install and uninstall files, windows packages (current and previous versions of a component) and out-of-band releases. You should not completely delete this folder. Post Windows 7 SP1, there is now a way to remove the unnecessary files from this folder using the command line (elevated/admin mode -> Click Start -> Type “cmd” in Search. Right click on “cmd” and choose “Run as Administrator”). This is great for reducing the Windows folder size for SSDs and netbooks. In my case it saved 3.5GB of space.