Munterizer,
yraq was referring to the disk cleanup functions (which can also be found by opening 'My Computer' > right-click your hard drive - usually "C:\" > select 'Properties').
Once you are in the Local Disk Properties dialog, you should see a "Disk Cleanup" button under the 'General' tab. Click that button to tell Windows to look for any files that can either be deleted or compressed to free up some space on the drive.
After Windows finds the information, another dialog box will appear with two tabs: (1) Disk Cleanup tab - which has check boxes for selecting the deletion or compression of files, and (2) More Options tab - which includes the 'System Restore' category with a "Clean up" button.
On the first tab (Disk Cleanup tab), yraq is telling you to make sure the top three options are selected, and then click 'OK' to perform the clean up.
You will then need to click the "Disk Cleanup" button again (found in the "Local Disk Properties" under the 'General' tab).
This time, when the dialog pops up, click the 'More Options' tab and then click the 'Clean up' button in the System Restore category. This will prompt Windows to delete all but the last System Restore point.
Note - System Restore is set by default to use up to 12 percent of your hard drive space to hold restore points. If you have been running your machine for a while, then it is possible that the full 12 percent is being used by System Restore which would prevent you from having more space for storage. If your system is running fine with the exception of a lack of space, then deleting all but the last System Restore point is safe and should give you some valuable space for saving files.
I hope this clarifies things a bit.